FTC Asked to Investigate ‘Abusive Practices’ by 7-Eleven

DALLAS — The Service Employees International Union (SEIU) is petitioning the U.S. Federal Trade Commission to investigate alleged "abusive practices" by a group of major franchisors, including 7-Eleven Inc.

In its petition, the SEIU ​— backer of a campaign to better the environment for low-wage retail and fast-food employees — alleges several abuses on the part of franchisors including 7-Eleven and McDonald's Corp., including incomplete or misleading financial performance representations, unreasonable capital expenditure demands, retaliation against members of independent franchisee organizations, unfair termination, unfair non-renewal, and interference with transfers or sales.

Specifically regarding 7-Eleven, the 2-million member union highlighted franchisees who felt they were being taken advantage of.

"The franchise sector bills itself as a path to the American Dream, but the truth is that franchisors like 7-Eleven and others have made this business into a trap,” Jas Dhillon, part of a group of 7-Eleven franchisees who filed a lawsuit last year claiming the company unjustly forced store owners to terminate their agreements, told Entreprenur.com.

“Franchisors hold all the power and so they can churn through one operator to the next, leaving us with nothing while their profits continue to soar," Dhillon continued.

As CSNews Online previously reported, 7-Eleven has stated the allegations put forth last year were false.

"Good, hardworking, independent franchisees are the backbone of the 7-Eleven brand," the company stated. "As to those few franchisees who violate the law or the franchise agreement, we are determined to protect our guests, employees and other franchisees by ending the relationship, where appropriate. We are confident in the thorough and lawful system that we have in place to accomplish this."

Dallas-based 7-Eleven Inc. operates, franchises or licenses a total of 10,500 stores in North America.