7-Eleven Inc. Conducting Post-Raid Franchisee Reviews

Tells all franchise stores to perform internal audit ahead of field audits of employee files

DALLAS -- As it moves quickly to deal with the fallout from the federal raids early this week on more than a dozen franchisee-run 7-Eleven convenience stores in New York and Virginia over exploitation of workers, Dallas-based 7-Eleven Inc. has send a letter to approximately 5,700 franchisees reminding them of their employee eligibility obligations. It also is requiring them to conduct an internal review of personnel and to expect a corporate review.

The federal government on Monday indicted eight men and one woman from Long Island, N,Y., charged with conspiring to commit wire fraud, stealing identities and concealing and harboring illegal immigrants employed at 7-Eleven franchise stores throughout Long Island and Virginia.

Through this scheme, the defendants, who owned, managed and controlled 14 7-Eleven franchise stores during the course of the conspiracies, allegedly hired dozens of illegal immigrants, equipped them with more than 20 identities stolen from U.S. citizens, housed them at residences owned by the defendants and stole substantial portions of their wages.

7-Eleven Inc. has begun reopening the stores closed in the raids under corporate control with corporate managers and employees.

In the letter to franchisees, 7-Eleven executive vice president and COO Darren Rebelez said, "Pursuant to the franchise agreement, franchisees have an obligation to comply with all legal requirements concerning the accurate and thorough completion of the Employment Eligibility Verification Form I-9 for every employee they hire. … Failure to comply will result in serious consequences, including the possible termination of [the] franchise agreement."

It added, "We know that you are the sole employer of all associates in your stores, and we are not attempting to interfere with your employment relationship or control how you hire, fire or manage your employees; however, we have a critical need to protect the integrity and reputation of the 7-Eleven brand, a right to insist upon your compliance with the franchise agreement and to ensure that all franchised stores are being operated in a lawful manner."

It also said, "Beginning July 1, field consultants will visit all stores to review I-9 documents and determine if any are missing or contain substantive violations. If any I-9 is determined to be missing or to have substantive violations, we will issue you a breach notice requiring an appropriate cure of the deficiencies."

Incorrect forms "could result in fines from government agencies of $110 to $1,100 per I-9 form," the letter said.

A 7-Eleven franchisee in the Midwest told CSP Daily News that 7-Eleven Inc. has been relatively quiet about the East Coast issues. The retailer, who requested anonymity, said communications have been limited to a brief explanation of what happened in Virginia and New York and the I-9 memo.

7-Eleven operates, franchises or licenses more than 10,000 7-Eleven stores in North America. Globally, 7-Eleven has some 50,000 stores in 16 countries. During 2012, 7-Eleven stores generated total worldwide sales close to $84.8 billion.