7-Eleven Franchise Complaints

236 thoughts on “7-Eleven Franchise Complaints”

• I’m sure all has seen the news that some 7-elevens in NY were raided by immigration officials today.

• I posted it here:
  http://www.unhappyfranchisee.com/7-eleven-franchises-raided/

  What do you think? SEI is “cooperating”

  Think SEI really has no idea this is going on?

  Think the economics of their franchise program isn’t a contributing factor?

• SEI (corporate) absolutely knew franchisees are under paying their employees.
  I personally had this issue come up when I worked at the corporate office.
  7-Eleven corp doesn’t audit the franchisee employee paperwork, and have NO internal controls in place to monitor minimum wage, SS#’s, or I-9 compliance for hiring. SEI merely stated that employment -HR issues “are an independent contractor responsibility” and that releases them from any liability.

• How SEI doesn’t know ? When SEI handles all the payroll taxes. When SEI must be filing withholding taxes with states and with IRS. So no authority have raised that these are dead people’s ssn.
  5 employees look after whole east coast’s franchisee accounting.
  7-11 is joke.
  Questions for 7-11
  Who gave Baig that many stores ?
  Why 7-11 was failed to see where the money was coming from ?
  Why Baig group obtained that many stores in that many states with their employee’s name. 7-11 is directly involved. But poor franchisee are on stake.

• If all franchisee will start complaining federal trade commission, There is possibility in next 10 years, they and their policies/contract get investigated.

• I am currently Franchisee from last 3 years.
  I can tell my frustration in 2 sentences.
  If i won the lottery, i will make class law suit against 7-11 practices, which will benefit to all franchisee.
  If some one can/will return my 40% franchisee fee of 310k , i have paid.. i will sell my store without looking.
  I rather sell hot dog on cart in downtown than owning a seven eleven franchisee.

• Today 7-11 went to franchisee in NJ who was franchisee owner association president, and asked him to surrender his 5 stores as his licence is cancelled.
  The person went to court to get injunction.
  Another store 7-11 are asking to surrender in long island( nothing t do with feds)
  his owner is Ex chairman of National Coaltion of franchisee owners association.
  7-11 is after franchisee owners association and they want to take their stores back.
  How weaken the contract is- that 7-11 can come to any franchisee store and ask him his store back..
  NEVER EVER buy 7-11

• It is sad and unfortunate, but the franchise community has no one to blame but themselves. Their “elected leaders/representatives” were forewarned this type of activity would happen, and they collectively did nothing to prevent it. They continue to select “representatives” who themselves exhibit questionable personal and business practices or who have personal agendas which are not necessarily in the best interest of the entire franchise community. Right now they have an “elected” chairman of their National Coalition who has a direct and distinct “conflict of interest”, “pretending” to represent Franchisee interests and rights, while acting as a financially compensated broker of product and services, directly to SEI.
  These “targeted” Franchisees have no more guilt than those at the helm of 7-Eleven and SEI. There is NO WAY that 7-Eleven officials did not know the manner in which these Franchisees were conducting their business. SEI has not ONE, but TWO, West Point Graduates at the helm of this “international” corporation. You want us to believe they are that “unintelligent”??? NO WAY, JOSE!!!!
  And those “friendly” field consultant visits are used to place undue force and pressure on Franchisees to give up their status as “Independent Contractors”, not to “help them be successful”.. In this case, complicity and guilt is a two sided street and Mr. DiPinto and Mr. Rebelez are riding right next to the Franchisees they are pursuing. Shame on all of you!!!

• To ALL 7-Eleven Franchisees: IT IS TIME TO UNITE, TO PUT A STOP TO THE ABUSES. SEI and it’s leaders are only going to intrude more and more if you do not take steps, NOW, to stop them. The abuses your are currently suffering under began in earnest when the Japanese gained control of the company and got worse when they put Joe DiPinto at the helm. 7&I has an exact agenda and Joe and Darren intend to see it completed, unless you take the steps to hold SEI to the same degree of accountability and performance as they do you. THEY ARE NOT YOUR FRIEND!!!

  Your current elected National Coalition leadership, under the guidance of Bruce Maples, are not inclined nor motivated to take the actions necessary to truly protect your interests and investments. You need to find leaders who are not afraid of SEI, 7&I, 7-Eleven Inc., nor Joe and his goonies.

  I believe it is time for a class action complaint to the IRS demonstrating why you are employees of 7-Eleven and no longer Independent Contractors. There is sufficient case history and testimony by past 7-Eleven employees to support such a filing.

  I believe it is time for a class complaint to the Federal Trade Commission, demonstrating complicity between Coke, Pepsi, McLane, and any other provider which is supporting the “Business Transformation” Model, in interference and restriction of trade.

  So long as you allow your current “leaders” to sit in their nice rooms and Suites in AAA facilities, on you dime, and you don’t give them SPECIFIC goals to accomplish, you will suffer from their collective inaction. Find new leaders who will take action over convenience. If you do nothing more, you will also reap more nothing!

  ALL OF US, are guilty for what is happening now. Guilty for having a dream or a better life for our families; Guilty for saving to make that dream come true; Guilty for working so hard to make success happen that we did not see what was beginning to happen to us and our dream; Guilty for believing that everything 7-Eleven was telling us could be trusted, guilty in believing Bruce and others really were representing us. Now it is time for us to represent ourselves. Stand up and Act, now!!!

• 7-Eleven franchisees may want to contact franchisee attorney Jerry Marks at Marks & Klein because he is interested in possibly pursuing a class action on behalf of 7-Eleven franchisees. He is representing franchisee Sodhi but speaking to many others.

  His contact info is in our franchise attorney directory:

  http://www.unhappyfranchisee.com/resource-directory/franchise-attorney/jerry-marks/

• Independent Contractor. You and we agree that this Agreement creates an arm’s-length business relationship and does not create any fiduciary, special or other similar relationship. You agree: (a) to hold yourself out to the public as an independent contractor; (b) to control the manner and means of the operation of the Store; and (c) to exercise complete control over and responsibility for all labor relations and the conduct of your agents and employees, including the day-to-day operations of the Store and all Store employees. You and your agents and employees may not: (i) be considered or held out to be our agents or employees or (ii) negotiate or enter any agreement or incur any liability in our name, on our behalf, or purporting to bind us or any of our or your successors-in-interest. Without in any way limiting the preceding statements, we do not exercise any discretion or control over your employment policies or employment decisions. All employees of the Store are solely your employees and you will control the manner and means of the operation of the Store. No actions you, your agents or employees take will be attributable to us or be considered to be actions obligating us

• 26. Termination.

  (a) Termination by Us. We may terminate this Agreement (subject to your right to cure where stated below) for the occurrence of any one (1) or more of the following events (each of which you acknowledge is a Material Breach and constitutes good cause for termination):

  (1) Upon forty-five (45) calendar days’ notice to you, subject to your right to cure during such forty-five (45) calendar day period, if:

  (a) you do not operate the Store as a 24-Hour Operation or for a different number of hours of operation which we have agreed to in writing before the reduction in hours of

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  operation, unless the reduction (1) is the result of governmental regulation and (2) is not directly or indirectly caused by your acts or omissions;

  (b) you do not comply with any agreement to which you and we or our Affiliate are a party or with a master lease pertaining to the Store or 7-Eleven Equipment if a copy of the pertinent provisions of such agreement or lease has been provided to you, or with the usual and normal terms of any lease transaction we may enter into with respect to the Store or 7-Eleven Equipment;

  (c) you do not use the Store or 7-Eleven Equipment solely in connection with your operation of the Store under the 7-Eleven System;

  (d) you do not properly maintain the Store and 7-Eleven Equipment;

  (e) you do not obtain our advance written consent for making any additions to the Store or 7-Eleven Equipment or discontinuing using any of the 7-Eleven Equipment;

  (f) you do not remit insurance proceeds to us which are due and owing to us under the terms of this Agreement;

  (g) you do not indemnify us as required under Paragraph 18;

  (h) you do not comply with any provisions of Paragraph 31(f), except if you encumber, transfer or assign any ownership in the franchise in violation of Paragraph 25, for which we may terminate this Agreement on thirty (30) calendar days’ notice without an opportunity to cure pursuant to Paragraph 26(a)(3)(b); or

  (2) Upon thirty (30) calendar days’ notice to you, subject to your right to cure during such thirty (30) calendar day period, if:

  (a) you improperly use or jeopardize (through advertising or otherwise) the Store, the Service Mark, the Related Trademarks (or the goodwill represented by any of them), copyrights or advertising owned or licensed by us, the 7-Eleven System, or the 7-Eleven Image;

  (b) you offer or sell any Proprietary Product or other product bearing the Service Mark or any of the Related Trademarks that you have purchased from a source not authorized to produce or offer such products, and you have duly reported your purchase of such product(s) to us;

  (c) you do not pay in a timely manner any taxes or debts with respect to the Store or 7-Eleven Equipment which you are obligated to pay, or a tax lien is imposed on you which affects the Store, so long as such failure to pay or the imposition of such tax lien is not caused by us;

  (d) you do not maintain workers’ compensation coverage as required by Paragraph 18;

  (e) you fail to comply with Paragraph 15 regarding the merchandising and Inventory, Proprietary Products, product packaging and display, nationally and regionally promoted and exclusive products, retail selling prices, and designated service vendors;

  (f) you do not comply with the 7-Eleven Foodservice Standards that we establish from time to time (including the requirement to wear uniforms), except for your failure to comply with any 7-Eleven Foodservice Standards for the Foodservice Facility, with respect to which we

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  may terminate this Agreement on three (3) calendar days’ notice and opportunity to cure pursuant to Paragraph 26(a)(6) below;

  (g) you do not notify us in an accurate and timely manner of discounts, allowances or premiums you receive or of your retail selling prices;

  (h) you do not obtain or maintain all licenses, permits, or bonds necessary, in our opinion, for your operation of the Store, so long as such failure to obtain or maintain the licenses, permits, or bonds is not caused by us;

  (i) you violate or fail to comply with any applicable law, rule, regulation, ordinance or order relating to the operation of the Store, including those relating to the sale of alcoholic beverages;

  (j) the unpaid balance in the Open Account becomes immediately due and payable, but you do not repay our loan to you in accordance with this Agreement;

  (k) you fail to comply with Paragraph 12(f) regarding the use of the 7-Eleven Store Information System and data;

  (l) you do not provide records or reports we require, as provided herein, or do not cooperate with us in obtaining information from any of your vendors or state agencies, except for your failure to provide the records and reports listed in Paragraph 26(a)(4)(b) below for which we may terminate on three (3) Business Days’ notice and opportunity to cure; or

  (m) except as provided in Paragraphs 26(a)(1), (3), (4), (5), or (6), you otherwise commit a default under this Agreement which is susceptible of being cured or a default under any amendment which is capable of being cured and for which the amendment does not specify a notice and cure provision.

  (3) Upon thirty (30) calendar days’ notice to you, and with no right to cure, if:

  (a) a voluntary or involuntary petition in bankruptcy is filed by or against you, you make an assignment for the benefit of creditors, or a receiver or trustee is appointed;

  (b) you attempt to encumber, transfer or assign any interest under this Agreement or the assets of the franchised business in violation of Paragraph 25;

  (c) you are convicted of, or plead nolo contendere to, a felony not involving moral turpitude;

  (d) you do not maintain an independent contractor relationship with us;

  (e) you offer or sell any Proprietary Product or other product bearing the Service Mark or any of the Related Trademarks which you have obtained from a source not authorized to produce or offer such products, and you have not duly reported your purchase of such product(s) to us; or

  (f) you misrepresent, misstate, or fail or omit to provide material information required as a part of the qualification process.

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  (4) Upon three (3) Business Days’ notice to you, subject to your right to cure during such three (3) Business Day period, if:

  (a) your Net Worth is less than the Minimum Net Worth required by Paragraph 13(d);

  (b) you do not properly record, deposit, deliver, or expend and report Receipts or deliver deposit slips, cash reports, and all supporting documents, receipts for cash Purchases, and invoices or other reports of Purchases as required by Paragraph 12; or

  (c) during the times in which you are required to be open, you do not permit any Audit provided for in Paragraph 14 or you deny access to any part of the Store, 7-Eleven Equipment, Inventory, Receipts, Cash Register Fund, cash register receipts or readings, amusement machine, banking and other equipment readings, money order blanks, bank drafts, or Store supplies.

  (5) Upon three (3) Business Days’ notice to you, and with no right to cure, if:

  (a) you vacate, desert or otherwise abandon the Store (and, immediately after we determine that you have abandoned the Store, we may take possession of the Store pursuant to the provisions of Paragraph 26(f), operate the Store for your benefit during such notice period, and charge your Open Account for Operating Expenses and other costs that we incur in connection with the operation of the Store on your behalf);

  (b) you are convicted of, or plead nolo contendere to, any charge which involves moral turpitude;

  (c) you disclose Confidential Information in violation of Paragraph 5 (provided, however, that we will not deem you in Material Breach of this Agreement as a result of isolated incidents of disclosure of Confidential Information by one of your employees if you have taken reasonable steps to prevent such disclosure, including the steps a reasonable and prudent owner of confidential and proprietary information would take to prevent disclosure of such information by its employees, and further provided that you pursue all reasonable legal and equitable remedies against such employee for such disclosure of such Confidential Information); or

  (6) Upon three (3) calendar days’ notice to you, subject to your right to cure during such three (3) calendar day period, if you fail to comply with any of the 7-Eleven Foodservice Standards related to Foodservice Facilities or you fail to allow a quality assurance inspector into the Store when requested.

  (7) Immediately upon notice to you with no right to cure, if you violate any of the Anti-Terrorism Laws.

  (8) Upon forty-five (45) calendar days’ notice to you and with no right to cure, if a provision of this Agreement (including all or any part of Paragraphs 15, 16, or 22), which we, in our sole discretion, determine to be material, is declared invalid by a court of competent jurisdiction, as set forth in Paragraph 31(e).

  (b) Curing Breaches; Multiple Defaults. If a Material Breach is curable, as specified above, and if you have not previously been served with three (3) separate notices of Material Breach within the two (2) years prior to the occurrence of a fourth (4th) Material Breach, you shall have the right to cure any Material Breach set forth above prior to the expiration of the notice period for that Material Breach (or such other period as may be imposed by law or by any agreement to which we are a party), by

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  taking such actions (or allowing us to take such actions on your behalf) as we may reasonably determine to be necessary to restore us to substantially the same condition we would have held but for your breach. We will not use any notice of Material Breach as a basis for terminating this Agreement if: (i) such notice of Material Breach has been determined by a court not to have been validly issued, or (ii) if we agree that such notice of Material Breach was not validly issued.

  If you have been served with three (3) separate notices of any Material Breach within the two (2) years before a fourth (4th) Material Breach, we may terminate this Agreement immediately upon notice to you of the fourth (4th) Material Breach in such two (2) year period without any opportunity to cure, whether or not such Material Breaches are of the same or different nature and whether or not such Material Breaches have been cured by you after notice by us. Following the fifth (5th) anniversary of our notice to you of any Material Breach, such Material Breach will not be used as a basis for termination under this Paragraph 26(b), provided that such Material Breach has been cured.

  (c) Termination on Death or Incapacitation. We may terminate this Agreement upon thirty (30) days’ notice (or such longer period that we may determine or as required by applicable law) if you die or become incapacitated. However, if you are more than one (1) individual and only one (1) individual dies or becomes incapacitated, we may, at our option, (1) continue this Agreement with the survivor or non-incapacitated individual or (2) require the survivor or non-incapacitated individual to execute our then-current form of Store Franchise Agreement, which contains the same financial terms as this Agreement, for the remainder of the Term of this Agreement.

  (d) Market Withdrawal. We may terminate this Agreement upon not less than thirty (30) days’ Withdrawal Notice (or such longer time that we determine or as required by applicable law), if we determine, in good faith and in a normal course of business, to cease the operation of all 7-Eleven Stores in the relevant geographic market area (being the state or metropolitan statistical area (“MSA”) or similar designation as periodically established by the Office of Management and Budget or any replacement governmental office), or in a geographically separate area outside of a MSA in which the Store is located. You acknowledge that such determination and action will be “good cause” for termination. In the event of a sale, transfer or assignment of all of our right in the Stores in the area, or a decision by us to close the Stores in your area, you will have the right of first refusal, or of purchase, as the case may be, to be exercised within the first ten (10) days after you receive the Withdrawal Notice, to acquire and receive assignment of all of our non-proprietary rights in and to the Store, the equipment (specifically excluding, without limitation, the 7-Eleven Store Information System) and real property. Such right will be exercisable upon the same terms as agreed upon between us and a bona fide third party transferee, or in the absence of such an agreement, at a purchase price determined by an appraiser appointed by us and upon terms acceptable to us. If the purchase price is to be determined by an appraiser appointed by us, the decision of the appraiser will be final. All costs of appraisal will be shared equally by you and us. This Paragraph 26(d) does not apply if our agreement to sell, transfer or assign to a third-party our rights in the Store(s) in your area and/or the Franchise Agreement(s) related to such Store(s) contemplates that the Store(s) will continue to be operated as 7-Eleven Stores.

  (e) Transfer and Refund Rights.

  (1) In addition to the other grounds for termination set forth in this Agreement, this Agreement will terminate before the Expiration Date:

  (a) thirty (30) days before the loss of our Leasehold Rights;

  (b) if there is a condemnation (or transfer instead of condemnation) which results in our decision to discontinue operations of the Store as a 7-Eleven Store;

  (c) if there is casualty damage to the Store or 7-Eleven Equipment which we determine cannot reasonably be repaired or replaced within thirty (30) days; or

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  (d) the Store permanently closes because applicable law requires permanent closure of the Store, provided that the required closure is not the result of our or your acts or omissions.

  If this Agreement is terminated pursuant to this Paragraph 26(e), then for one hundred eighty (180) days following the date of such termination, you will have the right to choose either to transfer to another 7-Eleven Store available as a franchise (a “Transfer”) or to receive a refund of a portion of the Franchise Fee paid by you (a “Refund”), on the terms and conditions stated below, but you will not have the right to both a Refund and a Transfer. If, upon the expiration of such one hundred eighty day (180) day period, you have not elected to Transfer as provided below, you will be deemed to have elected to receive the Refund.

  (2) In order to elect to Transfer, you agree to either sign the then-current 7-Eleven Store Franchise Agreement for the new Store or complete a “Transfer Election Form”. If you elect to Transfer, and you meet the conditions set forth below, the Transfer will be completed within a reasonable time after you elect to Transfer, but in no event later than six (6) months after you elect to Transfer. If you are otherwise eligible for a Transfer, you also agree to meet all of the following conditions:

  (a) you are not selling or assigning your interest in the Store or transferring your interest to a third party pursuant to Paragraph 25;

  (b) you are not in Material Breach of this Agreement at the time of your election to Transfer;

  (c) you have had a Net Worth in an amount greater than or equal to the Minimum Net Worth required by Paragraph 13(d) for the one (1) year immediately before your election;

  (d) you execute and deliver to us the then-current 7-Eleven Store Franchise Agreement available for 7-Eleven Stores in the area in which the Store to which you wish to Transfer is located and a mutual termination of this Agreement and general release of claims, in a form substantially similar in all material respects to Exhibit H. You will not be required to pay a Franchise Fee under the new Store Franchise Agreement that you execute, and the term of such new Store Franchise Agreement will be equal to the term then remaining under this Agreement;

  (e) you have not been served with four (4) or more notices of Material Breach within the two (2) years before your election; and

  (f) you complete any additional training we request, but we agree to bear the costs for the training as provided in Exhibit D.

  If you have satisfied these conditions and you choose a Transfer, then the Transfer may be to any 7-Eleven Store you select (i) which is available for franchise, (ii) which has been open for business as a 7-Eleven Store for at least twelve (12) months, and (iii) for which you meet our then-current qualifications as we determine in our sole discretion. We will not be responsible for your moving or relocation expenses or any premium amount, broker’s fee or any other payment to a third party arising in connection with the Transfer.

  (3) If you elect the Refund, the Refund will be calculated by deducting twenty thousand dollars ($20,000) from the Franchise Fee you paid when you signed this Agreement; dividing the remainder thereof by one hundred eighty (180); and multiplying the result by the number of calendar months from the first day of the next month following the date you notify us of your election to receive the Refund through the month of the scheduled Expiration Date. If you are otherwise eligible for a Refund, you also agree to meet all the following conditions:

  (a) you are not selling or assigning your interest in the Store for a premium, or transferring your interest to a third party pursuant to Paragraph 25;

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  (b) you are not in Material Breach of this Agreement at the time you elect to receive the Refund;

  (c) you have had a Net Worth in an amount greater than or equal to the Minimum Net Worth required by Paragraph 13(d) for the one (1) year immediately before your election; and

  (d) you execute and deliver to us a mutual termination of this Agreement and general release of claims, in a form substantially similar in all material respects to Exhibit H; and (E) you have not been served with four (4) or more notices of Material Breach within the two (2) years before your election.

  (4) You will not have the right to a Transfer or Refund if (i) we terminate this Agreement for cause; (ii) you voluntarily terminate this Agreement; (iii) there has been a condemnation which results in our deciding to discontinue 7-Eleven operations at the Store and if you received any portion of a condemnation award as provided in Paragraph 8(d); or (iv) our Leasehold Rights expire and are not renewed or otherwise extended, or if our Leasehold Rights are terminated, as a result of your or your employees’ acts or omissions.

  (5) You agree that if one of the events giving you the right to elect a Transfer or Refund occurs, you will have no right to receive any damages from us, and the Transfer or Refund will be your only remedy.

  (f) Our Right to Assume Operation of the Store. We may enter the Store premises and take possession of the Store, 7-Eleven Equipment, Inventory, Receipts, Cash Register Fund, money order blanks, bank drafts and Store supplies and continue the operation of the Store for your (or your heirs’ or legal representatives’) benefit and account pending the expiration or termination of this Agreement or resolution of any dispute under this Agreement if: (1) the Store is not open for operation as provided in Exhibit D; (2) you die or become incapacitated, except as otherwise provided in Exhibit F (“Survivorship”); or, (3) in our opinion, a divorce, dissolution of marriage, or felony proceeding in which you are involved jeopardizes the operation of the Store or the 7-Eleven Image. On behalf of yourself, your heirs, and your legal representatives, you hereby consent to our operating the Store pursuant to the terms of this Paragraph 26(f) and agree to release and indemnify us from and against any liability arising in connection with our operation of the Store pursuant to this Paragraph 26(f).

  27. Mutual Termination; Termination by You.

  (a) Mutual Termination. This Agreement may be terminated at any time by written agreement between you and us.

  (b) Termination by You.

  (1) You may terminate this Agreement upon at least seventy-two (72) hours written notice to us (or shorter notice, if we accept it). If you elect to terminate this Agreement and provide us less than thirty (30) days prior written notice, you agree to pay us a termination fee in an amount equal to two thousand five hundred dollars ($2,500). We have the right to debit such termination fee to your Open Account.

  (2) Provided that you are not transferring your interest under this Agreement to a third party, then, on or before the ninetieth (90th) day following the Effective Date, you may terminate this Agreement upon ten (10) days prior written notice to us, and, if you execute a mutual termination and general release acceptable to us and comply with all other terms of this Agreement, we agree to refund, without interest, an amount equal to the Franchise Fee minus the training expenses stated in Exhibit D which we have reimbursed you for or paid on your behalf; provided, however, that you are not eligible for

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  this termination right and refund of the Franchise Fee if you are (a) a previous or renewing franchisee, (b) a franchisee who has a 7-Eleven Store Franchise Agreement with us other than under this Agreement, or (c) our former employee. This right to a refund of the Franchise Fee is in no way related to the Refund right described in Paragraph 26(e).

  28. Close Out Procedure.

• JURY TRIAL. YOU AND WE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS SECURITY AGREEMENT IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT.

  (e) Cumulative Rights, Etc. Our rights, powers and remedies under this Security Agreement will be in addition to all rights, powers and remedies given to us by applicable law, the Franchise Agreement or any other agreement, all of which rights, powers, and remedies will be cumulative and may be exercised successively or concurrently without impairing our rights under this Security Agreement. You waive any right to require us to proceed against any person or to exhaust any Collateral or to pursue any remedy in our power.

  (f) Governing Law, Construction. This Security Agreement will be governed by and construed according to the laws of the state in which you are located from time to time in effect except to the extent preempted by United States federal law. It is expressly stipulated and agreed to be your intent and our intent at all times to comply with applicable law governing the highest lawful rate or amount of interest payable on the Obligations. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Franchise Agreement, or contracted for, charged, taken, reserved or received with respect to the Obligations, or if our exercise of our remedies under this Security Agreement or the Franchise Agreement or if any payment by you results in you having paid any interest in excess of that permitted by applicable law, then it is your and our express intent that all excess amounts previously collected by us be credited on the principal balance of the Obligations (or, if the Obligations

• This reads like a Franz Kafka novel…..”you are guilty if we say you are guilty and if you plead innocence then in our sole discretion we will determine you to be doubly guilty unless you cry uncle in which case pursuant to paragraph 47(h) we may allow you to plead guilty”……If there was ever a need for legislation leveling the field in franchised business relations the foregoing is it……abuses by franchisors are out of control and unscrupulous franchise business models force otherwise hard working honest people into bankruptcy or worse……..this must end!

• Moving forward, I think the independent contractor status of 7-Eleven franchisees is an important issue. Do you think that SEI has crossed the line and is exerting SO much control over franchisees that they can no longer be considered independent business owners?

  Do you think this designation is still valid:

  “Independent Contractor. You and we agree that this Agreement creates an arm’s-length business relationship and does not create any fiduciary, special or other similar relationship. You agree… to exercise complete control over and responsibility for all labor relations and the conduct of your agents and employees, including the day-to-day operations of the Store and all Store employees… we do not exercise any discretion or control over your employment policies or employment decisions. All employees of the Store are solely your employees and you will control the manner and means of the operation of the Store…”

  Has SEI exerted control or had influence over your employment policies or employment decisions, for example?

• Before I go too far I would like to share something with each of you;
  ” The general rule is that an individual is an independent contractor if the payer (SEI) has the right to control ONLY the result of the work and NOT what will be done and how it is done.”
  “In determining whether the person providing services is an employee or an independent contractor, ALL information that provides evidence of the degree of control and independence must be considered.”
  “You are NOT an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action.”
  These are all taken directly from IRS code defining factors which designate (legally) whether you are an employee or an Independent Contractor.
  Does SEI tell you how to do the work and what to use to get it done, and when it must be completed? Does your Market Manager or Field Consultant come into your store and dictate these things to you and openly or subtly threaten you with punitive action if you do not comply in the proper manner, fashion and time frame?
  Does any “employee” of SEI come into YOUR store to tell you how to do anything? If they tell you what to do and how to do it, YOU ARE AN EMPLOYEE AND NOT AN INDEPENDENT CONTRACTOR!!!
  Once again I would ask each of you to help Jerry Marks help you. CONTACT HIS FIRM IMMEDIATELY to request his help. It is time to take the battle to SEI and the Japanese owners instead of continuing to wait to see what they will try to do to you! Hold them as accountable for their actions and transgressions as they do you!
  How many of you know and can prove that you are getting ALL of the manufacturer rebates and allowances they are paying to SEI on your behalf? You will NEVER know because you do not even know how much SEI is actually receiving on your behalf. Hell, the manufacturers don’t even know if you are getting your fair share. How many of you are getting a a percentage of the “placement allowances” manufacturers are giving to SEI? You aren’t sure of that either, because SEI NEVER discloses that information to you. YOU NEVER KNOW WHAT THEY ALL GIVE TO SEI ON YOUR BEHALF!!! It is NOT a partnership and you are not independent by IRS code requirements! Contact these attorneys who are trying to hold SEI accountable for their deeds and misdeeds against you.
  Regardless what those poor “accused” Franchisees may have done, we can not overlook the fiduciary responsibilities SEI not only overlooked, but violated in the way they have treated these people. SEI is trying to take the heat of themselves by openly blaming and punishing the Franchisee. The recent actions taken by Joe DiPinto and his gang only provide more evidence that you are employees and not independent contractors. Ask yourself this, how can the Japanese again make record profits (on your backs) and still try to punish those who provided those profits for them??? It is because YOU ARE EXPENDABLE!! Profits at all costs, and look at how much money SEI stands to gain (that they do not share with you) from forcing those franchisees out of the system and “selling” those stores to someone else. At $250 thousand to $500 thousand per store, they stand to gain a lot of revenue that is free and clear!!! More than the store is likely to make in profit for several years…

  I apologize for jumping all over the place. It just makes me so angry that SEI is being allowed by the Franchisee Community to get away with all this. Your National Coalition Chairman will NOT represent you well!!! Please, contact Jerry Marks and lets put a stop to this mistreatment and violation of your rights!!!

• SEI is planned 7-11 experience Seminar in Vegas Next year in January like this year.
  SEI have made 6-8 millions dollars. SEI pressured franchisee’s to come to Vegas through FC/Market manager’s.
  SEI made millions from vendors. They sold booth for $50k to $500k. They TOLD vendor to attend their (SEI)TRADE SHOW or they won’t be 7-11 approved vendor. They told franchisee to attend Seminar or they are not getting the second store.
  Now SEI made million because of franchisee’s with the trade show they have done at seminar.
  My question to every one is.. Shouldn’t we the franchisee have right on that profit made by SEI , if we are their 50% partners.

• It is important that Franchisees give 7 Eleven the EXPERIENCE of not going to Las Vegas next January even if it for FREE.
  Let’s all pass a message to Joe his Goons next January.

• I’m currently franchisee with 7-eleven and have different store but at these time these company become so unfair and selfish. Because even on the gross profit split they promote 50 percent but really not with ur new store depends on ur sale if u sale more ur split is less. Which makes the franchisee frustrated for doing good u get punished.

• I have been a Franchisee for 9 years. It seems now I have less and less control of my Business, whoops I must be 7-11 Franchise Manager.
  You are an Employee 7-11 when the Market Manager sends F C to my store to do 2 cash audits, I guess to see if I stealing my own money, $500.00 or so for the Month on gross sales of about $185,000.00
  Imagine this, if I was a independent business owner, they would not do this. I let them do it to prove I not doing anything wrong, Maybe I should stop selling Lottery and hiring new employees so no mistakes happen. Maybe the FC’s would do the audit right the first time so I would not have to correct his mistakes.
  What should I do with this situation? help.

• Dear Chairman, Bruce Maple:

  Please accept my apology first and in advance if any cases. I don’t have any personal issue with you except you are the chairman of 7-11 franchisee’s group.

  Your leadership is getting useless, you are not doing a right job for the group. STEP DOWN. STEP DOWN. You lost already your leadership.

• Falcon…he cannot resign….he is waiting to SERVE SEI LEADERship while he waits for next water contract. Bruce has always ONLY served himself. If National Coalition re-elects him the coalition will be done.

• Ben,
  That’s interesting, at first I thought a fellow Franchisee
  was putting me on about the water contract with 7-11 a few months ago.
  Conflict of interest, using the office of the National Coalition?
  Who is running the Coalition Joe de Pinto?

• Bruce arraigned the first Classic Select water deal…..I can’t fault a person for their efforts but don’t give me this “defender of the little man” routine when biting the hand that feeds you could jeopardize that relationship. Bruce has played both sides for years and his only motivation has been his SELF interest. I’m sure most people would do the same BUT when a person steps up to serve a cause THEN self interest MUST take a back seat. For this reason the National Coalition needs to consider hiring a non-franchisee Executive Director responsible to the membership not their bank account.

• The future of 7-11 USA is not bright at all, unless SEI fire all of management team members, and replace them. The reasons I figure that out:

  1. No one take a roll of ownership.
  2. No one take a responsibility.
  3. No qualified employees.
  4. No lessons learned from the mistake. – FM, Accounting, ISP, Lotto, Physical inventory, etc….
  5. No one worry about their future, too easy going on their work but too tough to FZ.
  6. No one figure that out the real problems.
  7. Only care of the their profit, not FZ’s
  8. Look down the working bees(FZ).
  9. Top down approach: military system and Japanese culture.
  10. A lack of communication.
  .
  .
  .

• I guess the planned IPO is being put off? With all this swirling around I can’t see Wall Street getting excited.

• There have not been any effective new ideas out of the franchisor to help make the brand more relevant to more consumers, for at least 10 years. There isn’t a lot of evidence that would suggest that the franchisor even has a consumer strategy. Now they are adding sites at a greater pace, and further diluting this shrinking customer base, so of course the business model is strained….

  The management team can shift capital investments to (only) improve their short term needs, they can shift operating costs to franchisees, and they can reduce their cost on services provided to stores (and the brand). The team has effectively done all of that in recent years, and I am sure that these moves helped the company look strong….. but as a franchisee, I can attest that they are also driving a wedge in the relationship between the “Z’s” and the “Or” – When my business partner no longer cares about my success, that feeling will generally be reciprocated.

  It appears that the 7-E team has adopted a perspective that “they” are losing customers, because fz’s are doing a bad job, therefore they are trying to take control of all decision making….Unfortunately, we have been trying to execute the same sales plans over and over again, for almost 15 years now – Why is it that stores are able to understand what works and doesn’t work inside of a few days, and 7-E decision makers roll the same failed programs year after year, apparently hoping for different results???

  What the franchisor’s current leadership is missing in all of this, as that they transferred the consumer relationship to the franchisee when they collected the fee….. In this day of “social media”, it will be impossible for this brand to gain favor with new consumers, much less keep current customers, if their franchisees don’t even like them.

  When folks realize that it no longer makes sense to invest in the brand, (it probably hit that mark 2 years ago), then quality current franchisees will walk away, and new franchise fees will dry up. The franchisor will then either have to “adapt” to a more balanced relationship with their consumer partners (franchisees) or the brand will “die” as a viable retail entity in the U.S…… I hope that it isn’t too late.

• WOw! Concerned….you nailed it….put another way “Central Planning” always ultimately fails.

• cant a franchisee just decide to not play by their rules? SEI has done serious cost benefit analysis before coming up with their programs.

  cdc, they make 600% on bakery items before selling them to their own stores( or i would given the same products at the prices they charge). no wonder they want you to order tons of these items, even if you write off 100% they still triple.
  are they earning a 25% royalty from manufacturers of supplies bearing 7-eleven logo? i would if i were them.

  Food service- Impossible to make money as a franchisee, best you can hope for is to offset some existing labor costs. a simple formula that nobody has ever took the time to explore (well, sei has)

  for the franchisee:
  Gross sales minus (COGS/2) minus Labor,typically 21%of gross for efficient fast food restaurants minus cost of supplies,minus 50% of net cost on any writeoffs.

  for SEI:
  Gross sales minus (COGS/2) minus 50% net cost on any writeoffs

  i would take sei formula any day, no wonder they are pushing fast foods so hard. The more you sale the more you lose, unless you are just adding efficiency to idle workers, but honestly just send them home.

• At least when we made stuff in stores (I know, I know food safety and quality blah blah blah) you had a chance at actually making money. I had a “component deli” up until RESTORE in mid 90.s sold on average 45-50 units a day at 50% GP B4 writeoffs, along with dogs and things and did OK…..when the “made fresh yesterday items rolled out sales dropped to at best 17-20 a day at a lousy 25% GP B4 writeoffs…..you know the rest of the story…..”one more improvement and you become a non-profit entity.”

• If I were Wall Street investor, I’m not gonna invest any money. If you visit the 7-11 stores, they are VERY lagging behind old old model. Although SEI is updating the store a certain area, it will take another 10 years to go nationwide updating based on their progress.

  SEI take it a strategy to kill their working bees(Franchisee) first. Franchisees are stand up the front line to contact the customers, if FZ are not happy, what the results are we expecting? I know there are some bad behavior FZs, not every FZs. SEI see all FZs are same bad guys. It’s easy to kill brand name, but it’s not easy to build the new name.That’s why I don’t see the bright future in 7-11.

  Market manager and FC reply simply that if you are not happy, sell it and quit. I heard several times when I spoke out the above situation. This is their mind set.

• I’m not intimidated about the new tactics of $250.00 cash short a month will bring a cash audit by a 7-11
  You just convinced me that I bought a job not a Franchise.
  Market Managers and F C s are you for real? Do you think I Stealing My Own Money?

• I seem to recall that a cash audit MAY be performed one a year. Am I recalling something from an old agreement? I don’t think a cash audit can be triggered on a whim.

• Call the National Coalition Office and see where Mr. BM stands on the issue…..on second thought don’t call, it might interfere with his DVR mediation that is almost one year old.

• I have had 2 cash audits in an 8 month period. Nothing irregular was found. But I did have 6 FCs wasting 6 hours of my time and a combined 36 hours of payroll for 7-Eleven. Now the strangest thing I encountered was that the FCs are required to follow the Franchisee from store to store and never let them out of sight.I am not kidding !! According to written instructions of the Asset Protection Manager, the FCs should follow the Franchisee home, if the FZ says that he/she took the deposit home, and physically be present while the deposit is being made in the bank. I will let you guys form your own opinion on this. But I think that anytime any FZ speaks out against 7-Eleven or their illogical policies, that FZ becomes a target and a cash audit is the first step toward the intimidation process.

• Over and Out ,your right.
  Calling Bruce M might will not get anything accomplished. The water contract might
  interfere with the National Coalition’s real function which is to stand by it’s members.
  MOST of us are honest and being screwed by 7-11.
  Don’t worry Joe de P has it all controlled, WOW!

• Calling the Coalition office might get you targeted by SEI. Have to see if 7-11 lobbies for Bruce in next months election like last time.

• All FOAs should hold their President’s feet to the fire and DEMAND that the president vote for the candidate that the majority of the membership favors, not what the FOA president “thinks” is best. We do not elect them to “think” in favor of SEI. We afford them the elected offices because we believe they will at least DEFEND our rights!

• Unfortunately for us, Joe de Pinto will always makes sure he gets his man in the National Coalition office, he has done that for the last few years.
  Result is we are weakened organization at the mercy of S E I.
  Why have we build those $ Millions in the coffers NCASEF and not use it to protect us from what’s being done wrong to us.
  A strong organization with a the right person or persons would makes us a viable group, S E I would think twice about anything.
  Simply said FOA’s let’s hire a professional to represent us at the National Level.

• Unfortunately for us, Joe de Pinto will always makes sure he gets his man in the National Coalition office, he has done that for the last few years.
  Result is we are weakened organization at the mercy of S E I.
  Why have we build those $ Millions in the coffers NCASEF and not use it to protect us from what’s being done wrong to us.
  A strong organization with a the right person or persons would makes us a viable group, S E I would think twice about anything.
  Simply said FOA’s let’s hire a professional to represent us at the National Level.

• @ Unhappy. I agree with you wholeheartedly. But how do we start? I believe SEI revolves around the TAKE, TAKE and TAKE mantra! There seems to be no end in sight. If this was about a country and FZs were the citizens of that country and SEI was the administration, then SEI would be held in gross violation on human rights!

• Code of Ethics of NCASEF
  Fellow Franchisees
  if the National Coalition followed every paragraph the Code of Ethics they would not be so silent right now.

• All is quite on the SEI Front. What are they upto now? Please make your vote count at the National Coalition Election this time. Call your respective FOA presidents and
  DEMAND that they vote according to the wishes of the majority of the membership.

• I agree Bruce Maples should leave the NCASEF. Ask your FOA president NOT to vote for him. Bring the new chairman on conditions. Select chairman only who know how to fight with SEI.
  No one is talking how SEI took 4 stores in Chicago last week. They threatened fz to leave the keys or he will be sued for extra million dollars.
  He handed over the keys and went home. Is there seriously fz have any agreement with SEI ? if they have a right to terminate the agreement without notice, then is this secure investment ?

• Keep Bruce Maples, and nothing will change, from SEI attitude towards Franchisees to SELECT WATER with 7-11
  Any normal being knows there is a conflict of INTEREST here.
  FOA leaders do the what’s right on the next election we need CHANGE.

• Dump the current regime, including vice chair and hire a “paid professional” national spokesman. Someone who SEI cannot buy.

• How much money does Bruce get paid by NCASEF?
  I what has he done for us?

• The National Chairman is paid over 100K a year PLUS travel expenses PLUS vendor spiffs PLUS water contract PLUS unlimited golfing PLUS selling out hard working franchisee’s

• Wow. I never knew that Bruce Maple gets paid for his position. I though its volunteer job.

• 7-Eleven Inc. Takes Over Several Chicago Stores
  Franchisees removed for allegedly violating terms of franchise agreements
  CSP Daily News | September 11, 2013

  CHICAGO — 7-Eleven Inc. has taken over a number of convenience stores in Chicago from the franchisees, in some cases for allegedly selling nonapproved items, according to a report by DNAinfo Chicago.

  One local operator said he was forced to relinquish ownership of four 7-Eleven stores in Wicker Park, Lincoln Park, Boystown and Lincoln Square. Another franchisee said the Dallas-based company took over his stores in Lakeview, Lincoln Park, Jefferson Park and Portage Park.

  Franchisee Jay Rawal told the news outlet that 7-Eleven officials cleared his store’s shelves on Friday of “the stuff they didn’t want me to be selling,” and security guards emptied his files into black trash bags, which they gave back to him.

  Rawal said he was ousted by 7-Eleven because officials alleged he “wasn’t running operation according to standards.”

  7-Eleven spokesperson Margaret Chabris issued a statement: “7-Eleven Inc. has terminated the franchises at those locations because the franchisees violated the terms of our franchise agreement. As a result, we assumed control these Chicago-area stores, and they are now open and operating under the management of 7-Eleven Inc.”

  Hashim Syed, a franchisee who publishes a newsletter for 7-Eleven’s local franchise community, said the company’s crackdown also has snared other Chicago franchisees. “[7-Eleven is] saying these franchisees were buying merchandise from outside vendors and not reporting to 7-Eleven and keeping profits themselves,” he told the news outlet.

  Syed called 7-Eleven’s allegations “serious, but not proof. All we have is allegations, accusations.”

  Rawal admitted that he was selling certain noncorporate-approved items, such as certain soft drink brands, like Sunkist. But Rawal said he stocked the items at the request of customers.

  Rawal also confirmed that pen-sized hookahs, which appeared for sale on the counter of the Wicker Park 7-Eleven last week, were removed in the inventory sweep and given back to him.

  By late Friday, the 7-Eleven in Wicker Park had reopened with all new staff, said the report, although lottery tickets were unavailable for purchase because the license had been taken out in Rawal’s name, Mark Kwasigroch, the store’s new manager, told DNAinfo.

  Kwasigroch confirmed that all of Rawal’s employees had been removed from Rawal’s stores Friday. He said he and other employees were transferred to the Wicker Park store from other corporate-owned stores.

  In addition to 27 employees dismissed at Rawal’s four stores, an additional 31 employees were laid off at four stores owned and operated by Frank Fatehali in August, Fatehali told the news outlet.

  A 7-Eleven franchise owner for more than 15 years, he said the corporation took over his stores at the beginning of last month, forcing out workers at shops in Lakeview, Lincoln Park, Jefferson Park and Portage Park.

  Fatehali declined to say why 7-Eleven took over his stores. His lawyer has been negotiating with the company to get his stores back, he said.

  In recent weeks, takeovers also have occurred at three stores in Jefferson Park, Avondale and Park Ridge, Syed said.

  Rawal said he was seeking compensation for his investment from 7-Eleven. Syed said he has heard that other franchisees who have lost their shops received settlements.

  http://www.cspnet.com/news/corporate/articles/7-eleven-inc-takes-over-several-chicago-stores