Company News

7-Eleven Sues Franchisee

$5 million payment was "mistake," company said
DAYTONA BEACH, Fla. -- 7-Eleven Inc. has filed a federal lawsuit against a franchisee the company claims was "mistakenly" given nearly $5 million, but which will not give it back, reported the Daytona Beach News-Journal. Spokesperson Margaret Chabris said 7-Eleven closed the store earlier in the week, despite having "every intention" of operating at that location.

"The franchisee owes 7-Eleven a considerable amount of money, and she has basically abandoned operations at the store," Chabris told the newspaper. "We exercised our right to take possession of our system, [image-nocss] our proprietary equipment and merchandise. We are terminating the franchise agreement with this person."

Although Chabris declined to identify the franchisee, federal court records cited by the paper show the suit was filed against Jane L. George and Sarah's Big Tree Gas & Go LLC, a corporation George formed last year. George is the sole managing member of that corporation, according to state Division of Corporation records, and owns the building and property, Volusia County records show.

Douments filed with U.S. District Court in Orlando state 7-Eleven "mistakenly made a series of deposits" totaling $4,954,614 into an account held by George and her corporation. After discovering the error, 7-Eleven officials tried to contact George by phone, e-mail, certified mail, hand deliveries and in person, but George has refused to discuss the matter or return the money, the suit states.

Chabris said she did notbelieve that 7-Eleven has filed criminal charges.

University of Florida Professor Bart Weitz, who also is executive director of the David Miller Center for Retail Education, said that he did not believe thesituation with George will present a roadblock for 7-Eleven's plans to franchise most of its company-owned stores in Florida. "I think it's an anomaly," Weitz told the paper. "[7-Eleven] probably didn't do a good enough job of checking out this franchisee...but the company has a large number of franchisees across the U.S., some who started at co-owned stores and some who were business conversions, and they're doing well overall."

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