7-ELEVEN Franchise Lawsuit Alleges Exploitation of 7-11 Franchise Owners
In the latest 7-Eleven franchise lawsuit, 1200+ 7-Eleven franchisees allege that 7-Eleven, Inc. turned their American Dreams into Orwellian nightmares.
(UnhappyFranchisee.Com) A 7-Eleven franchise association (FOAGLA, Inc.) comprising more than 1200 franchisee members, and five individual franchisees, have brought suit in the Eastern District of California against 7-Eleven, Inc. alleging that the Japanese-owned convenience store giant has downgraded the role of its franchisees from independent contractors to that of mistreated employees with no decision-making authority, has subjected them to Big Brother-like video surveillance and monitoring, and has violated their civil rights in an exploitive scheme to drive corporate profits at their expense.
The dramatic allegations in the lawsuit have inspired a viral video critical of 7-Eleven, Inc. & CEO Joe DePinto, entitled 7-ELEVEN Franchise Blues – A Protest Song.
7-Eleven, Inc. Accused of Racial Discrimination & Bullying
7-Eleven franchise owners, many of them of South Asian origin, pay the 7-Eleven franchisor corporation an up-front franchise fee (often in the hundreds of thousands of dollars) in exchange for the right to operate one or more franchised stores as independent contractors, and to share a percentage of the store profits.
The suit alleges that especially after Tokyo-based Seven and I Holdings.Co. acquired 7-Eleven, Inc. and took the company private, it launched a predatory scheme to extract maximum profit at the expense of its South Asian and other franchisees.
According to the FOAGLA, Inc. suit, 7-Eleven systematically stalked, spied on, racially targeted and subjected its franchisees to absurdly rigid daily controls… stripping them even of the right to control the temperature of their stores or the volume of their in-store monitors.
The lawsuit also alleges that 7-Eleven, Inc. launched a predatory initiative wherein it unfairly terminated the agreements of franchisees with successful stores, reacquired the stores at no cost, then resold them to new franchisees at a “windfall profit,” an illegal industry practice known as “churning.”
The FOAGLA lawsuit also alleges that 7-Eleven, Inc. “readily deployed any means necessary to brutally discredit and crush any franchisee who voiced opposition or dared to stand up to its predatory practices.”
7-Eleven, Inc. Accused of Churning Franchise Stores for Profit
FOAGLA’s Complaint, Case No. 5:14-cv-01432 was filed on July 11, 2014 — the annual “7-Eleven Day”. The lawsuit details these various abuses and seeks equitable relief against 7-Eleven to stop its racial discrimination and profiling of South Asian FOAGLA members and franchisees. The suit also addresses 7-Eleven’s malicious retaliation against association leaders, invasion of franchisees’ privacy rights, and a misclassification of franchisees as independent contractors when they are, in fact, employees.
FOAGLA asserts that 7-Eleven must be dealt with head-on and its policies and procedures must be investigated with careful scrutiny the court. FOAGLA member Jas Dhillon, stated on behalf of the association: “This lawsuit was absolutely necessary to address 7-Eleven’s racial bias, its vendetta against vocal franchisees and harassment. As a result of this conduct, all of our businesses have suffered. FOAGLA brings this action in a united front to protect our members’ investments, privacy, livelihoods and, in some cases, their safety.”
FOAGLA’s lead counsel, Gerald A. Marks, Esq. of the Red Bank, New Jersey law firm of Marks & Klein, LLP stresses the importance of the larger civil rights issues at stake: “What needs to be understood is that this not a standard franchise dispute. Rather, this is a case about civil rights violations and affects many innocent and loyal franchisees. This action needed to be brought in order to protect FOAGLA members as well as all affected franchisees, and to restore balance to a franchise system that has spun out of control,” Mr. Marks stated. “We look forward to proving these claims on the merits before the federal court.”
Mr. Marks’ partner, Louis D. Tambaro, Esq. also commented: “As is well known, we at Marks & Klein are staunchly committed to protecting our franchisee clients’ rights and to combat every type of franchisee abuse. As alleged in the lawsuit, 7-Eleven is plagued by such abuse and franchisees are suffering. Such conduct cannot be tolerated, and that is why we are asking the court to impose the appropriate relief.”
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I am a very upset current 7 11 franchisee in so cal.
The very first day I signed the contract I saw the term independent contractor on each and every line giving false impression that you are going to be independent business owner but that down the road realized that I have been misled by 7-eleven. Everything you are told is a pure lie. You are nothing more than a slave. You can’t even move one shelf from here to there without their consent. You have to stand in line to get the crumbs of bread you earned but only after your master is full and content. You see that piece of crumb starting off as a loaf but by the time you get it in your bowl it is nothing more than left over pieces.
Who ever said that we are free should be caught and face consequences of making such outrageous statement. You may be born free but you will not die free.By the time you die you Will be filled with remorse , remorse of wasting your life , your hard work , time away from your kids , and living every moment in morbid fear of being shot just to help a monster grow stronger and ruthless.
Seven eleven has been built, raised and stands in the pool of our sweat and blood. This is the epitome of glorified modern day slavery. People look at me with awe , a young entrepreneur and I don’t even know how should I react . Smile just play along or yell at him for being smarter than me for not investing in 7-eleven. I don’t care anymore . It is like a gastric ulcer. I have to live with it.
But I want to say to everyone regardless of whatever work you do from doctor to janitor, please remember when you buy any services from seven eleven you should know that service is being brought to you by slaves. Any penny you spend at 7-eleven is just helping to maintain the cycle of new slaves coming in place of old ones that have been churned and nothing left in them.