Franchisees Allege 7-Eleven 'Flipped' Their Stores

Company counters with allegations of falsified records, violated agreements

7-Eleven (CSP Daily News / Convenience Stores)

DALLAS -- In the last two years, at least a dozen franchisees of 7-Eleven Inc. have sued the company, alleging it stripped them of their convenience stores for false reasons, according to a report by The Los Angeles Times.

Some plaintiffs say 7-Eleven targeted successful stores in high-traffic areas, then "flipped" them to new franchisees willing to pay the company higher fees, according to the report.

7-Eleven counters in court documents that some of those franchisees were stealing--depriving the company of its full share of the store profits, often by falsifying sales records. Company investigations led to "hardball" negotiations between the store owners and 7-Eleven, which pressured franchisees to give up their stores or face potential prosecutions, according to court records cited by the newspaper.

"Good, hardworking, independent franchisees are the backbone of the 7-Eleven brand," 7-Eleven said in a statement provided to CSP Daily News. "As to those few franchisees who violate the law or the franchise agreement, we are determined to protect our guests, employees and other franchisees by ending the relationship, where appropriate. We are confident in the thorough and lawful system that we have in place to accomplish this."

The statement continued, "7-Eleven Inc. will vigorously defend any actions that former franchisees file against the company.  During the course of litigation, certain information about franchisee conduct may become a matter of public record, just as it has in other situations where 7-Eleven Inc. has filed suit to terminate a franchisee relationship based on its thorough investigation and conclusion that the franchisee has violated the law or the provisions of the franchise agreement."

Part of CSP's 2014 Convenience Top 101 retailers