7-ELEVEN Ordered to Disclose Franchisee Termination Plan (Project P)
Attorneys for 7-Eleven, Inc. have lost their battle to keep from disclosing internal documents regarding “Project P” (aka “Project Philly”), a controversial initiative to target and terminate multiple 7-Eleven franchise owners.
(UnhappyFranchisee.Com) 7-Eleven franchisees involved in three lawsuits against 7-Eleven, Inc. have won their bid to get access to internal documents and correspondence they believe will prove that they were victims of a malicious, orchestrated and unlawful plot by the franchisor to seize their stores and resell them for profit – a practice known as “churning.”
7-Eleven franchisees involved in three combined lawsuits (SAM YOUNES, et al., v. 7-ELEVEN, INC. ; 7-ELEVEN, v. KARAMJEET SODHI, et al.; NEIL NAIK, et al. v. 7-ELEVEN, INC.) being argued in U.S. District Court, Camden, NJ claim that they are victims of a predatory corporate initiative in which their franchise stores were unfairly seized for financial, political and racially discriminatory reasons.
Whistleblower and 7-Eleven insider Kurt McCord previously indicated, in a sworn certification, the existence of such a program:
7-Eleven, Inc. has designed and implemented a predatory program to increase corporate profits by unethically stealing the equity and goodwill of its franchisees. In some cases, these franchisees spent decades of hard work and financial investment building their businesses.
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7-Eleven’s scheme was to use its superior financial, legal, and corporate strength to seize the stores of profitable franchisees without providing them fair compensation for the years of goodwill they accumulated. The 7-Eleven Corporation would then resell those stores at an enormous profit.
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Using an internal team masquerading as an Asset Protection (Loss Prevention) Department, 7-Eleven set a yearly number of stores to take back, prioritizing locations in areas with the highest resale values or, in some cases, operated by respected franchisees who had spoken out about the corporate giant’s corrupt practices.
One part of the alleged internal initiative has come to be known as “Project P” or “Project Philly.”
In oral arguments on behalf of the 7-Eleven franchisees, attorneys from Marks & Klein argued that 7-Eleven should turn over all internal documents related to “Project P.”
Despite strenuous objections from 7-Eleven’s attorneys, Judge Joel Schneider agreed with Marks & Klein and issued this order:
O R D E R
The Court having heard oral argument on March 6, 2015 involving, inter alia, discovery disputes concerning the production of 7-Eleven’s documents; and the Court noting that the production of 7-Eleven’s “Project P” documents has been a continuing source of dispute in the case; and this Order further clarifying the Project P documents 7-Eleven must produce; and all references to “documents” in this Order intending to also refer to ESI; and for good cause shown,
IT IS HEREBY ORDERED this 11th day of March, 2015, that 7- Eleven shall produce the “Project Philly” or “Project P” information and documents designated in this Order; and it is further
ORDERED that all references to Project Philly or Project P shall also include “Operation Philadelphia,” “Operation Take Back,” “Philadelphia Project,” “Operation P,” “Philly Project,” “Penn Jersey,” and what Mr. Sussman referred to as 7-Eleven’s “accountability project” or “accountability efforts.” These references shall refer to the effort 7-Eleven apparently started in the 2011/2012 time frame to either terminate or take back franchises. These references shall also refer to what 7-Eleven refers to as the “staffing initiative” resulting from the anticipated termination of multiple franchise agreements following investigations for franchise fraud; and it is further ORDERED that 7-Eleven shall produce the following documents regarding Project P or Project Philly:
1. All Project P or Project Philly documents mentioning or referring to the franchisee parties in these cases or their stores;
2. All documents 7-Eleven relied upon to decide that Sodhi’s franchises should or might be terminated;
3. All documents 7-Eleven relied upon to list Younes and Atalla on P20, 22, 25, 26 and 33B;
4. All summaries, notes and minutes of meetings where Project P or Project Philly was addressed including, but not limited to, all PowerPoint presentations created for or shown at at the meetings;
5. All documents sent to or received from 7-Eleven’s Executive Committee regarding Project P or Project Philly; and
6. All documents regarding how and why 7-Eleven decided which stores to list on Exhibits P26 and 33B; and it is further
ORDERED that 7-Eleven’s document production shall include an affidavit from an authorized company representative attesting: (1) that to the best of the affiant’s knowledge all sources of information where responsive documents and ESI could reasonably be expected to be located were searched; (2) that all individuals who reasonably could be expected to possess or control documents responsive to this Order were contacted regarding the Order; and (3) that 7-Eleven’s search for documents responsive to this Order was reasonably designed and calculated to identify and locate responsive documents; and it is further
ORDERED that this Order does not excuse 7-Eleven from producing other relevant non-privileged documents requested by the franchisee parties or other responsive documents required to be produced pursuant to Fed. R. Civ. P. 26(a)(1) and 26(e). All alleged privileged documents shall be included on a privilege log; and it is further
ORDERED that all documents responsive to this Order shall be produced by April 1, 2015.
s/Joel Schneider JOEL SCHNEIDER
United States Magistrate Judge
Judge Schneider’s ORDER is a significant win for the franchisees, and the documents and correspondence related to “Project P” could provide clear evidence as to 7-Eleven, Inc.’s true motivation for selecting, targeting and terminating the franchisee stores that it has.
Read Judge Schneider’s Order in PDF form: 7-Eleven Project P Order.
ALSO READ:
Has 7-ELEVEN Declared War on its Franchisees? (Index of 7-Eleven Posts)
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TAGS: 7-Eleven, 7-Eleven Franchise, 7-Eleven franchise lawsuits, 7-Eleven franchise litigation, 7-Eleven litigation, 7-Eleven Project P, 7-Eleven franchise terminations, 7-Eleven Project Philly, 7-Eleven unhappy franchisee, Joe DePinto, Joseph DePinto,
Ruh-row!
7-11 has been lying to us franchisees. All along they steel our profits and hard work. Now the papers Judge has asked will clearly show me and you that they the management of 711 is made of?
I wish I had invested in something else and saved my self all this that we are being put through.
Do we know yet if all documents were produced today?
I have read the entire arguments and responses given and provided by national group and their attorney and responses given by unhappyfranchisee.com.my strongest opinion is the national group has sold out every single 7-11 franchisees respect and honesty to 7-Eleven Inc. for some favors they may get personally for short time.
I would urge all honest and hard working franchisees to contact their local FOA’s and ask them how or why did they sold their respect and honesty? Remind them the fight is not for individual gains or losses but rather the fight is for respect and freedom to work hard and honesty as 7-Eleven inc. calls franchisees as their partners.
All franchisee should ask themselves are they happy and do franchisees think they are busunessmens.By now everyone knows the name of each person in charge of your local FOA. Nothing wrong in saying they are traitor and coward and selfish. All national members are coward and spreading wrong rumors about themselves to hide their wrong decisions they made with 7-11 inc. they have sold out their respect and I think all honest franchisee should let them know Shame On You
and ask them to provide one good reason why did they sold their own self respect just for some stupid favors they might have received.
atleast I urge all California franchisees to atleast ask their local FOA commitee. to step down and take the right decisions.
Shame Shame Shame ……………………………….. To all those people who sold their self respect and lost all the trust and faith
Its still not too late to get Dave Hendricks on board. He can take these goons on. And with out support, we can set an example for future wannabees like JDP.
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April 8, 2016 at 8:50 pm
I tell you little story, there financial system totally a failure, I don’t understand why fbi is not investigating this Japan company to cheating US citizen employees and franchisees,
1. BC gets bonus based on your pre book order no matter you sell it or not
2. They put food related items in different categories to just show to fz that they are positive but in actual they are negative,
3. Lottery sale is added into inventory at zero cost at merchdise movement report so it show little bit profit because cost remain same and inventory increase but in actual it has to be redused from cost of product to do right math but I don’t understand why any fz is not raising voice , I did my bc said he will find out till date no answer ,
4. Cost is under 7-11 control , same product is 20 persent cheap outside then you buy from 7-11 so fz no make money only 7-11 does
5. 7-11 charges ground rent to manufactureres which is not ever shared with fz,
6. 7-11 charges 1000 dollerd average to every fz for advertising that money is never told who is spending and where it is spend on, all advertising material vendors contribute
7. 2000 doller every month aprox every fz spend on maintenance of machines which is gone to company called fm owned by 7-11 , they give profit to 7-11 or do free maintaince in corporate stores
8. Cdc which is 7-11 own delivery system gives millions in profit back to 7-11 which is not shared ,
9 audit every three months if you are 10000 short you have to give 6500 to 7-11 and they automatically decrease profit so if you make 4 present less that’s another 8000 less income and you end up making less money by 13-14 k they month , no explanation
10. Market manège risked big gifts and bc takes gifts + free coffee every week + free food + free drinks Etc no secret complaint for bc you can only complaint bc to bc
Ritual hi I feel you have touched some core issues totally neglected by fzs and their foas. I don’t have any faith in foas. They are like toothless tigers who does not roar but meows when master walks by. These japanese who
Own this company dont have any morals or respect for anyone not even themselves. They have completely changed my perception for their cultures.whatever was left has been doomed by the influx of South east Asians in the franchise system and however rude you may think it is but it is a fact that they are corrupt and will eat away on the moral fabric . I don’t have any regret calling my own community a very corrupt one because it is a quality that we inherit and we cannot help it . It is a part of our psyche and a life style where we come from. So getting some favor is justified over selling the common interest of all franchisees. Who cares …….
Greetings to all.
It has been a bit since I have been back to this site, because I had allowed myself to lose focus and had gotten extremely frustrated with Franchisee comments about the lack of appropriately focused agendas from their “leadership” and a distinct lack of coordinated effort to rid themselves of the dysfunctional representation. You are ALL still getting “screwed over” by SEI and nothing has improved, and will not improve, until you get representation which does NOT derive income from and therefore does not feel the need to succumb to the threats and demands of your “imperial” franchisor leadership. You are attempting to fight disorganized and small battles by yourselves while facing an experienced and well funded military tactician who has nothing to do with your small and “trivial” issues. The only thing this accomplishes is division or your strengths and attentions while SEI focuses its entire team efforts on the “big picture” and the long term goals, of controlling you more and getting more of your hard earned monies. I ask many times before and I’ll ask again, why are you allowing SEI to continue to violate trade regulations and basically coerce Coca-cola, Pepsico, McLanes and all major vendors into being a party to civil RICCO violation and trade restriction. Are the franchisees still subsidizing the CDC’s and companies like Genesis? Sure you are! Each and every one of you, ALL OF YOU, must send your field consultant, market manager, division VP , Coke, Pepsi, McClanes, Monster Energy, every other vendor company, Joe DePinto, each (Japanese) board-member of SEI a notice of breach/violation and demand they each/all cease and desist all efforts to control and directly or indirectly interfere with your status as an “independent contractor”. Your agreement specifically states that you have a legal obligation to protect SEI by holding yourself out as an independent contractor and you must therefore protect all of the aspects which allow you to maintain that designation. In that communication to each of those companies/people you must identify each and every action and policy/procedure you believe to be compromising and/or intruding on your freedom and ability to maintain that independent status.
It is still my belief that SEI, through Joe’s management style and team efforts, will continue to subjugate, demean and undermine you and your ability to even get near an independent status. Their accounting system is seriously flawed and has “stolen” millions of dollars from franchisees annually. I believe a federal complaint and demand for a forensic and independent audit would uncover potentially billions of dollars owed to franchisees from “bribes”, placement monies, purchase subsidy and other monies SEI gets from vendors for the “privilege” of doing business with them, which do not get shared equally with the franchise community.
Get together, do away with the current system of deficient “representation” and hire an attorney or someone else who is familiar with the business model and who will represent YOUR best interests and will not be bullied or intimidated by Joe and his crew of thugs. SEI, 7-Eleven corporate, can NOT operate without YOUR support. There are ways to stop the abuses coming at the hands of Joe and his team, but you all need to recognize that you have the power and without you and what you do, they do not have jobs and the system will stop if you do. You are allowed by agreement to close for the coming holidays. What do you think Joe and the board members would do if EACH AND EVERY STORE closed for Thanksgiving and Christmas days??? Think of the massive losses they would incur. All the CDC orders which would sit on their shelves. All the stuff they have that would go out of code! You have tools at your disposal. You just need to organize, come together with your common good as the cause, and take action which shows how much power you have. TAKE BACK CONTROL OF YOUR BUSINESSES AND LIVES.
How much would each franchisee lose if they closed those days? A couple thousand dollars, net? How much would SEI lose??? Millions and millions!
What if every franchisee in the system spent that same thousand dollars and flew to Dallas on 7-11 day next year. How much attention do you think the franchisee abuses would receive nationally. How many national publications do you think would want to be there to cover that size an event??? How much red would that put on the faces of Joe and the board members????
You have the power and the tools to help yourself. Take some type of coordinated action and bring the issues to national attention and HELP YOURSELVES, instead of complaining and asking others to do it for you. You have the power, you just have to make yourselves unavoidable…
I am a franchisee in Maryland. I have been robed by 7-11 for the past 15 years. I am willing to join in any class action suit based on Ritu’s listed points and other mischievous SEI action. Anyone interested in this, please contact me at [redacted]