7-ELEVEN Franchise Lawsuit Against Franchisee Pursharth Kapoor

7-Eleven has filed a franchise lawsuit against franchisee Kapoor Brothers, Inc. and Pursharth Kapoor in the United States District Court, Middle District of Florida, Orlando Division.

Pursharth Kapoor signed an individual franchise agreement effective January 16, 2012 for the right to operate and share in the profits of the 7-Eleven store in Merritt Island, FL.

Kapoor was charged a franchise fee of $141,500.

In connection with the franchise fee and franchise agreement, franchisee Kapoor entered into a promissory note agreeing to pay 7-Eleven $79,950 in monthly payments.  According to the complaint, the Note would be “immediately due and payable in full upon a breach of the Corporate Franchise Agreement.”

Less than a year into the relationship, 7-Eleven’s Asset Protection Group began investigating Kapoor’s store.  They allege they observed Kapoor’s brother (and store manager) “improperly and fraudulently utilizing… voiding keys on the POS register system.”

7-Eleven alleges that an audit of the store revealed “inventory being delivered for which 7-Eleven never received invoices,” indicating that Kapoor’s store was selling merchandise off the books for which it would receive full profit (rather than the 48% it was due).

Additionally, the suit alleges “at least one regularly employed person was working either without the franchisee having properly verified employment eligibility.

On June 20, 2013, just 17 months into the agreement, 7-Eleven declared that Kapoor was guilty of a non-curable breach and terminated the franchise agreement.

7-Eleven demanded immediate payment in full of the $70,000 due on the Promissory Note.

7-Eleven demanded that the franchisee immediately turn over the Leased Premises and all Equipment, that he relinquish the final inventory, that he cease using anything trademarked 7-Eleven, and that he immediately cease doing business at the Merritt Island 7-Eleven.

The lawsuit contains no mention of any kind of a hearing or appeal for which Kapoor could argue on his behalf, and it seems that the termination, the demands for payment, and the filing for the failure to meet the demands were all filed on June 20, 2013.

The 32-page complaint, filed by 7-Eleven law firm Quarles & Brady LLP, includes 11 pages of explanation on how the 7-Eleven franchise business arrangement works (which we’ll explain in a separate post).

It also raises some troubling questions, such as:

  • Is this a case if a blatantly dishonest franchisee getting caught red-handed and being dealt with swiftly?
  • Or is this a case of franchise churning, of a smoothly polished machine that generates high fees and indebtedness from franchisees, terminates and sues them, then generates high fees and indebtedness from other franchisees for the same store and inventory?
  • When was the Merritt Island 7-Eleven store built, and how many franchisees have come and gone in the years since?
  • Is there really no hearing or appeal process prior to complete termination?
  • Is it standard practice to make demands and simultaneously sue for failure to comply with those demands?  (I have a feeling it is.)
  • Does 7-Eleven make it clear upfront that its total control of the accounting process, their monitoring of POS system keystrokes, their crack 7-Eleven’s Asset Protection Group, and their non-curable breach termination process, it would be insanely risky to try to cheat them?
  • What would lead the Kapoors to risk their investment by cheating almost immediately?

7-Eleven certainly has the right to protect itself from franchisees who enter an agreement then violate it in order to cheat them.

However, there’s something about the icy precision and the speed of this process, as well as the lack of an appeal or opportunity to cure, that makes this lawsuit seem vaguely unsettling.

What do you think?

Read the entire 32-page complaint here:  7-Eleven, Inc. v. Kapoor Brothers Inc. et al

ARE YOU A 7-ELEVEN FRANCHISE OWNER, MANAGER OR EMPLOYEE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

 

Tags: 7-Eleven, 7-Eleven lawsuit, 7-Eleven litigation,7-Eleven franchise, Pursharth Kapoor, Kapoor Brothers Inc., 7-Eleven complaints, 7-Eleven, SEI,7-Eleven franchise complaints, 7-11 franchise, 7-11 franchise complaints, Seven & I Holdings Co, Merritt Island 7-Eleven,

31 thoughts on “7-ELEVEN Franchise Lawsuit Against Franchisee Pursharth Kapoor

  • June 27, 2013 at 9:53 am
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    Hi Sean,

    I would have thrown these dudes out, too.

    In this case, if they are guilty, the franchisor did the right thing.

    Fraud is fraud.

    Dishonest franchisees aren’t needed.

    And, I don’t care who the franchisor is.

    The Franchise King®

  • June 27, 2013 at 12:19 pm
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    There’s something weird here, Joel.

    On its surface, I agree. But there’s something unsettling about a $145,000 franchise fee, a $78,000 note, an investigation in less than a year, then a termination and lawsuit without any opportunity to appeal or have a hearing.

    7-Eleven seems just set up to take over and profitably resell stores without skipping a beat.

    I’m not saying that 7-Eleven Inc. is necessarily wrong here, or that its Japanese owners have anything other than the integrity of its franchise system at heart, just that this is a situation that COULD be abusive and there are a lot of questions remaining.

    For instance, this store looks pretty old. How many franchise owners have signed up for this very store and either failed or been terminated? Is it possible that this is not an isolated situation, and that owners are turned and churned? I don’t know, but would like to hear from 7-Eleven franchisees and insiders.

    Remember when Quiznos was sued for collecting millions in non-refundable franchise fees for stores they knew would never open, in markets they knew would not have locations they would approve? It’s not unheard of for franchisors to set up a situation where they succeed thru a cycle wherein franchisees fail.

    I hope I’m wrong, and hope others will give us some further insights.

  • June 27, 2013 at 2:53 pm
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    Yeah…but.

    Didn’t the franchisees in this case screw around with the POS system so they wouldn’t have to pay corporate?

    (Allegedly)

    JL

  • June 27, 2013 at 3:20 pm
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    That’s what corporate alleges. But the franchisee seemingly has no way to tell his side of the story, or to appeal? What if there’s an error with the registers? What if a manager was making an honest mistake? Obviously, there’s lots of room for language issues with running a 7-11. What if invoices were submitted to corporate but not entered?

    It might appear from what’s presented that the franchisee’s guilty, but there are trials in this country for a reason, and innocent til proven guilty IS kind of the American way.

    Maybe it’s a cultural thing coming down from the Japanese overlords at the home office in Tokyo:
    http://www.unhappyfranchisee.com/7-eleven-downplays-japanese-ownership/

    It seems a bit severe that in a single day, seemingly without warning (I could be wrong), the franchisee is simultaneously served with a termination, immediate eviction, a demand for $70,000, AND served with a lawsuit for not having vacated the premises or paid the $70K without even having been given the chance.

    What’s the rush? Why take the guys $145,000+ and not give him the chance to cure?

  • June 28, 2013 at 6:56 pm
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    I am a previous corporate 7-Eleven employee. I’m glad they are finally kicking out franchisees like this one, who set up shop as a front to steal from the company. I’ve seen many franchisees get caught stealing $30_40K/month is fake voids, only to have the company let them stay on – provided they repay- then go on to perpetrate more crime, in fake voids, cigarette thefts, buying msde “off the books”, not paying employees properly, etc.!!!
    It looks like 7-Eleven is finally getting serious about the 5-10% of franchisees who get into the business and commit fraud and felony level thefts of cash/msde.
    In all likelihood, this franchisee was approached in the past about this behavior, but just kept on stealing. No wonder he won’t leave his store… He’s making tons of illegal cash. The franchisee is trying to figure out how to steal everything possible until the sheriff comes with a court order to evict him.

  • June 29, 2013 at 9:14 am
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    Fluffy… And let me share from point of view of an ex-franchisee

    Don’t tell me that 7-Eleven cares about it’s franchisee… Corporate is stealing from franchisee, just that they are smart at doing it… Example:

    1. Lately I notice in neighborhoods around my area where Corporates are opening new stores so close to existing store that existing franchisee is losing out badly. And most likely the new franchisee also on the losing. This is the case of 7-Eleven corporate greed. 7-11 gets profit front the existing store… But now when 7-11 open the style new store pretty much literally one block away, the revenue of existing store must of go down due to now two store competing for the same customers in the area. However, 7-11 corporate is a win win situation for them, first 7-11 gets hundred of thousands dollars from the new franchisee. However now both franchisees potential earning dramatically reduced. For 7-11 it is the same or better profit because 7-11 is getting profit from both stores. So this is a case of 7-11 Corporate Greed at the expense of the franchisee. So plainly stealing from franchisees.

    2. Second points… 7-11 wants visibly into everything that franchisee does, however corporate is doing lots of things behind closed doors. Example, 7-11 wants stores to use the so call recommended (more like forced) vendors. However all negotiations with these vendors, franchisees are not allowed to be involved. So really, what kickback is 7-11 getting from the vendors that corporate is hiding. In the past, 7-11 got caught getting kickbacks from vendors and not sharing with the franchisee. But that time things spilled out cause of some disgruntled employee spilled the beans on them…. And yet 7-11 still operating behind closed doors where franchisees are not involved when the deals being done. But turn around demand franchisees to order items from 7-11 vendors. And if you don’t, 7-11 will find all kind of breach of contract against the franchisees and kick them out of the system and keep the franchisee’s hundred thousands dollars of franchise fee.

    3. The contract written is so one side where 7-11 has all the control and the franchisee just signed their souls away… It leaves a lot of interpretation and bend it anyway 7-11 choose. I guess this is one of their tool to easy to imposed a breach of agreement against a franchisee that they picked to be their next victim.

    Oh by the way … I always wondered:::: Franchisee cost for the inventory , ordered from 7-11 recommended vendor, were more than if someone walked into a local market….

    Anyway …I am glad I exit the 7-11 system of indenture services…

  • June 29, 2013 at 3:22 pm
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    I would like to say that the contract is in black and white they have read it and agreed to it .. I know plenty of franchise good and bad I’ve been around the 711 business for more than 15 years . I’ve been through plenty of change overs from corp to franchise.. And I agree great if they are standing ground to protect their name. But I also know that this is not done over night … Thievery is thievery now matter in what form and they do give them plenty of chances to fix their “mistakes”….

  • June 29, 2013 at 3:29 pm
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    Wow! How is this a franchise? The agreement seems to make the franchisee an employee. It’s a huge amount of money to give the company and risk they will just keep it if the company disagrees with you. There seems to be no room for a disagreement because the contract gives 7 eleven ownership of everything and total control of the stores monies. What is the profit protential for the franchisee? And the pressure must be almost unbearable.

  • June 29, 2013 at 7:33 pm
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    X-franchise-
    I am not claiming 7-Eleven Corp is perfect, but at least they are ridding the system of the blatant, rampant criminal franchisees. This is positive, as they are hurting the brand image and other honest FZ’s
    1) The new store development plan may be canabalizing existing store sales in some cities. In some instances, 7-Eleven may end up with unprofitable stores. It’s in no one’s best interest for this to happen. I’d say it’s not greed, but ignorance – especially in the real estate dept. The company just doesn’t have use good metrics or data to figure out how close to put stores.
    2) All franchisees agree to purchase a minimum amount of product from authorized vendors, who provide rebates, bill backs, and advertsing dollars that benefit all stores. This is in the FZ agreement- did you not understand that?
    They also give the FZ the ability to purchase products they want to carry. About 2% of their total inventory.
    3) I never executed a breach against a franchisee that wasn’t legitimate. Prior to a breach ( which can be cured in most cases- ) the FZ would be given a courtesy or “letters of notice” to correct any deficits. There is a well defined list of violations that will land a breach with NO previous warnings- and these are very serious- usually fraud, theft, abuse, etc.
    The basis to draw these documents up are well defined in the franchise agreement, and must also be approved by 1-2 additional levels in the organization before being sent to a FZ .
    Sorry you had a bad experience. It amazed me that at least 20% of my franchisees never really did enough due diligence, or bothered to really understand the agreeement they signed.

  • June 30, 2013 at 6:26 am
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    “The new store development plan may be canabalizing existing store sales in some cities. In some instances, 7-Eleven may end up with unprofitable stores. It’s in no one’s best interest for this to happen. I’d say it’s not greed, but ignorance – especially in the real estate dept. The company just doesn’t have use good metrics or data to figure out how close to put stores.”

    fluffy:

    Do you really expect us to believe that franchisees are losing their life savings because of a goodhearted but bumbling real estate department? I just read how 7-11 hides the fact that it is a huge, public Japanese company that has crammed 14,000 stores in 7-Eleven’s home country of Japan.

    http://www.unhappyfranchisee.com/7-eleven-downplays-japanese-ownership/

    The U.S. so far has 1/2 as many 7-Elevens as Japan but 3x the population. They’ve already said their goal is to open thousands more.

    Give your Japanese employers more credit than that. It’s pretty brilliant. If they cram 100 stores in an area that can only comfortably support 30, they drive out the competition, kill the bodegas and independents, and squeeze the maximum sales out of the area, and continually collect franchise fees from hundreds of franchisees who pay $150K and finance inventory, then are replaced by new franchisees who do the same.

    Your Japanese overlords are pretty smart cookies. No wonder you bow down to them, do their bidding, and try to hide that corporate greed drives this franchise scheme.

  • July 1, 2013 at 3:29 pm
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    Fluffy,

    As you mentioned, “In all likelihood, this franchisee was approached in the past about this behavior, but just kept on stealing. No wonder he won’t leave his store… He’s making tons of illegal cash. The franchisee is trying to figure out how to steal everything possible until the sheriff comes with a court order to evict him”

    how can u be so sure about they got warning but dey choose to continue stealing.? Don’t make your judgements based on ur bad experiences with franchisee! May be this is one innocent franchisee who has been a victim of 7eleven’s nasty corporate ways of working. Have you given a thought on, why the franchisee is not getting his own money he invested in the company.? Isn’t 7eleven being greedy to make maximum money from everywhere possible.? Just don’t make your judgments based on one sided story and your personal bad experiences with franchisees.

  • July 2, 2013 at 1:06 pm
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    Rosy-
    this is not an innocent franchisee. If you read the reports, 7-eleven has video and accounting records that revealed his fraud and theft. It’s routine that 7-Eleven would detect unusual cash and inventory transactions through the asset protection department, then approach the FZ with the facts. Historically, the company “allowed”
    the FZ the opportunity to pay back the company, unless the crime was so blatant and the amounts so large, they simply decided this FZ must not only be thrown out, he’s got to repay what was stolen.
    The company isn’t “going after” some innocent person being picked on. He can present his side of the story in court.

  • July 2, 2013 at 2:57 pm
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    This and many other franchises make more money when a franchisee fails rather than survives. The failures are not disclosed and become corporate owned and so not marked as failed. Each time a new franchisee gets in, he/she pays a hefty non-refundable franchise fee as well as brings in life savings, may be couple of hundred thousand Dollars to buy fresh supplies from the franchise. There is no motivation for the franchise to make the franchisee successful. Perhaps these franchisees were not really looting as portrayed, they were trying to survive the burden of loan and franchise expenses. Unfortunately, franchisees have no other exit than declaring bankruptcy. At least these franchisees brought the problem to the public. Most franchisees surrender and suffer silently without a protest. Modern day slavery!

  • July 2, 2013 at 6:19 pm
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    DPfranchisee-
    7-eleven DOES disclose all franchisees that *fail*. it’s in all the franchise disclosure documents, along with the previous/ex- FZ name/address. The only way 7-Eleven, or any other franchisor makes money is to have the franchisees successful. To say there’s no motivation to make the FZ successful is ridiculous.
    Your comment:
    “Perhaps these franchisees were not really looting as portrayed, they were trying to survive the burden of loan and franchise expenses”… Every FZ I had to approach with fraud and theft issues 100% rationalized their crime “it was a loan, I needed more money, etc.” . It sounds like you too, are trying to rationalize criminal behavior.

  • July 3, 2013 at 10:11 am
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    Fluffy- I am not sure about 7-Eleven but there are discussions in this board that show the idea of churning is not ridiculous and actually more profitable to the franchise than a franchisee continuing to run a store. Here is a real world example:

    Discovery Point at TN
    2005 – DP sold the franchised name, bus, equipment and building to the Zee for more than $2.4M with an estimated profit (to DP owners and not disclosed in FDD) of $700K+ from the sale of the package on that day. There was a start up loan, which was used for the payment of fixed Royalty to DP each month and was not included in that $700K profit. Zee did not have enough income and so the Royalty was paid from that loan- irrespective of the business cash flow.
    2007 – Zee tried hard but lost everything and saught help. Franchise offered to take over the operation for free in exchange of loan reduction. Franchise took over the running childcare and everything for free and then let Zee go bankrupt from the real estate loans. SBA pays off the gap and so bank did not loose anything. Zor buys back what it sold for $2.4M for $1M from bankruptcy- official transaction records are available on the web. The center was never closed- so it was not declared as closed or failed – only transferred owner. The owner was not corporate but a subsidiary owned by the corporate owners. So, it was not declared as corporate owned.

    Later that center was sold for more than $2M – with a net profit of more than $1M. Do your math – Zor could have never got this Million Dollar if the original Zee was in place. This is not an isolated incidence and is prevalent in franchises that sell building along with the franchised business. This churning and profit making is also popular with tool distribution franchises. There are enough documents and discussions on this topic in here as well as in Bluemaumau.

    Note that these are difficult to search. Zor pays big bucks to Google and lawyers and make these discussions non-searchable. Try Google or Yahoo with “Discovery Point” search and nothing will surface because these search engines have been paid to not to disclose. Do not want to get in technical details – but there is a flag built in each website address details to make it visible or invisible during searches and that flag can be bought with proper price.

  • July 10, 2013 at 12:43 pm
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    What’s really interesting is that many franchisors don’t allow the franchisee to own the building or hold the lease.
    If you don’t own the building, or at a minimum hold the lease, the franchisor has almost complete control of the business.

  • August 6, 2013 at 10:39 am
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    Fluffy,

    You seem to be a 7 eleven employee !!!!!!
    There have been multiple lawsuits against 7eleven in the last month where 7eleven has terminated contracts with its franchisees without giving them a warning, for example mr. Sodhi from NJ, case where he won the injunction done by 7eleven and was given the stores to run because allegations by 7eleven were not valid. He has filed a class lawsuit against 7elevn.
    After seeing all this it clearly indicates that the company is trying to harass franchisees because not giving a warning to cure is a breach by the 7eleven towards their own contract.
    Just because it’s a billion dollar company does not make them perfect and always right. They can make mistakes too!

  • August 6, 2013 at 5:36 pm
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    So sad, 7-11 feels they can do what ever they want without any legal repercussions, because of the way the contract is written.
    How ethical is this in running a business? CORPORATE GREED.
    How many Dallas people are “JUSTIFYING” their jobs by harassing Franchisees, churning stores and not caring how many people they ruin along the way?
    Good Franchisee to them is one that says “Yes Sir Whatever You Want I Will Do”
    On the other hand I wonder if some of these Franchisees were driven to do wrong since 2007 Management took over, because according to Japan we were making too money.

  • August 7, 2013 at 1:27 pm
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    Rosy-
    I used to work for 7-Eleven. I left due to non-stop chaos within the organization after the company reorganized during Project E. That left the company ill prepared for growth by eliminating the Zone/Market offices. You simply cannot run an organization this size by a “one size fits all approach” based in Dallas.
    Morale in 7-Eleven is terrible, from corporate employees to many franchisees. Joe Depinto and his “team” have done very little to change or improve communications and effectively manage FZ relationships. 7-Eleven needs a stronger, more influential FOAC board that truly represents their fellow FZ’s, and produces real results.
    All that said, 7-Eleven began to build a very strong asset management team a few years ago, who began to run & compile reports on “unusual” transactions. The 7-Eleven POS system is a gold mine for theives, as it allows mgrs’s and FZ’s to perform functions such as overriding a carton of Marlboros from $50 to $1 ( I had a FZ do this 1,000 – times in 60 days.) and pocket the difference in cash. The asset protection people began developing and compiling exception reports, and began understanding the depth of the internal thefts by coupon fraud, fake price overrides, over/under ringing items/ stealing thru fake voids, msde purchased “off the books” etc, etc.
    I personally had to approach 10 FZ’s about stealing in 60 days, as I had all the documents from the POS system, accounting, with days/times/cashier as compiled by asset mgt.
    Every FZ admitted wrongdoing once confronted with the evidence. 2 of these 10 FZ’s were given non-curable breaches due to the overhelming amounts stolen ($75k-$200K). These people were in business to steal, not run a legitimate business. These thefts also had to be booked as inventory shortage- I’m talking $275K in ONE MONTH!!!! for 2 stores!!!! The FZ who stole less -say $10-$50K were ALLOWED to stay!!! They had to sign promissary notes to repay and “cure their breaches”. I caught 2 of the 8 stealing the next month to repay the promissary notes. Filthy thieves!
    Can you imagine having a job and being caught stealing $30-50K, and they “let you stay if you repay the money?” and you have access to all the store’s cash, inventory and run the store?
    This disgusted me, as we termed corporate employees who got caught stealing $5 worth of food.
    The asset protection group began using more sophisticated tools & reports, and understanding the huges amounts of fraud/theft. This was brought to SR. Mgt, who had to face the fact 7-Eleven has some very shady FZ’s. Many make more money stealing than running their stores. Finally, Sr. mgt knew these FZ’s had to go, not for “mistakes” but for stealing. It’s taken a long time, but this is one thing the company is finally doing right- throwing out the thieves!
    These FZ’s are finally being targeted for elimination – AT LAST! I know they will have their day in court, but I know the evidence of fraud will be overwhelming.
    This isn’t churn, it isnt’ retribution, its kicking out some very, very bad people.
    Lastly, many of these FZ’s used their ill gotten gains for some unsavory and illegal purposes, as described to me by my ex-FZ’s who were caught stealing.

  • August 7, 2013 at 10:46 pm
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    Fluffy….you make many good pts….BUT…don’t give me this moral outrage crap from Dallas. Many honest zee’s warned them yrs ago that somethings were beyond belief in some stores. The very same folks now under the microscope were REWARDED with additional stores and held up as examples….all the while operating locations with payroll so low it is amazing they were open. This caused a run up in goodwill and FRANCHISE FEE’S! The economic business model for 7-11 is BROKEN. No sane person can operate a “by the book” operation and achieve a decent ROI. The risks zees assume cannot rewarded under this set up. Name another franchised business that the franchisee or employees run the risk of death or injury like a 7-11. SEI “milked that train too” so keep the “about time, long overdue” sentiment.

  • August 8, 2013 at 9:44 am
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    Fluffy:

    I don’t understand that you indicated $3.3Million($275K by 12 month) was stolen by FZ. How come? I knew a very few store’s ANNUAL SALES are over $3million. If they stole $3.3Million per year, they should go to jail.

  • August 8, 2013 at 10:13 am
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    Fluffy;;; I don’t wonder why you call yourself “Fluffy”. You are so full of BS and “Fluff”. It is apparent that during your time as a corporate employee you were sufficiently “re-programmed” to believe all that crap corporate keeps spitting out. 7-Eleven is the biggest sham and most abusive Franchisor still in business. Reading the agreement is only part of the program. But I ask you this, from your many years of experience, just how many Franchisees really understand the full impact and intent of the Agreement?? I bet it is fewer than 10%. How many of those same Franchisees believed that SEI would truly be a trustworthy and honest “partner” in the business?? I bet almost 100%. SEI and it’s employees are supremely adept at “lying” to and misleading Franchisees about most aspects of the Agreement and the SEI interpretation of it. If i had the money, I would bring Federal Complaints against SEI, 7 & I, Mitsui, and every arm of 7-Eleven, and use their own agreement versus what they are doing to Franchisees as evidence against them. There will always be a few bad apples in any bunch, but having those bad apples in no way grants the frequency and magnitude of violation being perpetrated by SEI and it’s employees. You are however an exception. Most ex-corporate employees I have encountered say that 7-Eleven is the worst there is.. Perhaps you need some time and re-education so you see the real picture and not what SEI has obviously implanted… You are the type of Franchisee that the Franchise community needs to NEVER have speak on their behalf! You probably don’t believe that there is a need for Federal Fair Franchise legislation to help protect Franchisee rights. What a shame…

  • August 8, 2013 at 10:36 am
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    Fluffy:::
    First, let me apologize for demonstrating my frustration at you directly for your comments and thoughts. It is so very difficult for me to watch and hear so many comments in favor and defense of such an abusive company. You may in fact be one of the true exceptions in the “past employee” arena, but the 7-Eleven system is so “broken” that the entire thing needs to be completely overhauled, and that would begin with legislation which would prevent 7-Eleven, and any other Franchisor for that matter, from the degree of persecution and intrusion into what is defined as an independent business supposedly run by an “Independent Contractor”. My entire family absolutely loved being Franchisees and we tried to prove that you could work within the guidelines and constraints of the Agreement and still be a profitable concern. Unfortunately, SEI, at the behest of their “Imperial Dragon Masters” decided that enough was no longer enough. They have, and still are today, violating almost every aspect of the agreement to their favor. How many errors in accounting have you experienced because of SEI errors? How many shortages have you experienced because of SEI accounting errors? How much money have you NOT received from SEI that the vendors have paid to go to you for your participation in their programs? You don’t know, and never will. When Franchisees discovered that SEI had “forgotten” to pay them some 3 million dollars in subsidy, SEI feigned ignorance and said it could not be true. BUT IT WAS! SEI accepts, and in fact DEMANDS monies from vendors that by agreement is required to be shared equally with Franchisees, and it is not!!! Please do not defend such offensive practices until you are also willing to work as hard to force compliance from SEI and all of their subsidiaries… Having a dream and believing in the promises and words of those who help you “sign your rights away” is not a crime. Misleading those with the dream should be..

    Again, I apologize to you directly, and I ask that you defend all of those “other” Franchisees rights who are NOT stealing and cheating, who are trying to make their dreams come true…

  • August 8, 2013 at 11:41 am
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    In general, after meeting with FC every week, I feel that so much fluctuation why I have to talk with this kind of unqualified people/company. They are talking about from the number of facing of the product to financial statement. They start to point out why you did order 4 instead of 8, why you didn’t accept promo master, why you didn’t clean shelf, why, why….etc. Usually I keep the clean store and well organized although old old style store. I heard so many customers told me that they never seen a clean store at 7-11.

    FC/Market Mgr never encourage the store sales associates and/or appreciate them who works for the guest. There are so many funny things to mention how they manage the store. SEI doesn’t have a clue how to operate except that way. If SEI has a buy back program, I want to accept it and leave.

  • August 8, 2013 at 2:15 pm
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    Comment on fluffy’s remarks that one Fz is overriding price on cigarettes 1000 times.
    Very Very hard to believe. 7-11 LP run reports every day for overrides.
    We are not saying 100% fz are right. But main issue remains.
    1) Old stores, Trashy look, No maintenance. 7-11 makes lot of money, but do not spend money on these stores.
    2) Accounting- 2 to 3 percent of GP is fraudulently not given. $2000 to $3000 per month per store
    3) same amount of purchase and more selling but fz are making less and less.
    4) Fz are paying 20% more for maintenance.
    5) SEI old employees became “contractors” so they can charge whatever (when they do licencing jobs for fz) and that charge becomes franchisee liability along with their thousand of dollars in “processing fee”
    6) No clear direction or approach

  • August 8, 2013 at 2:23 pm
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    If i work for LP and I go to franchisee that he had too many voids December last year.
    We would like to have an explanation on these voids. How will franchisee save himself. Fz cant see 90 days old transactions.

  • August 8, 2013 at 9:55 pm
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    Fluffy you right.
    They should breech these franchisees out of the system, it’s not right they are stealing so much money.
    Remember history teaches us that WHAT GOES AROUND COMES AROUND.
    7-11 will have they day for their Corporate GREED, sooner or later.
    Hopefully sooner

  • August 9, 2013 at 6:43 pm
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    How quick to judge??? Fluffy and most others are willing to see Joe and his “Goonies” vacate due process, and they are already claiming guilt on pure allegation and speculation. Until these people have had their day in court, they are innocent. Who in hell placed ANYONE employed at/by SEI (past or present) as judge and jury??? Shame on each and every one of you who would allow Fluffy or Joe or anyone else convince you of such guilt without defined and irrefutable proof. If any of you trust or believe what SEI says is true at any given time, shame on you. Liars, cheats, or blind followers, all of them. The only honest employees of SEI are those who openly declare that SEI and the current system is BROKEN!
    You all should be DEMANDING that SEI not be allowed to usurp the agreement and take away these peoples stores until they are PROVEN guilty. They may in fact all be ultimately found guilty of something, but they deserve to be heard and not run over by a bunch of crooked individuals. As SEI is attacking, and everyone else is personally avoiding, and claiming guilt for Tarik Kahn, you should all be screaming at the thought that SEI might be able to railroad him out of the system. Does no one find it conveniently “coincidental that SEI chose to surreptitiously plant a hidden camera in Mr. Kahn’s store, just after Joe unceremoniously thew Tarik out of Dallas and the PLC. And that shortly thereafter SEI intentionally interferred with State registered and recognized Trade Organizations by nthreatening FOA Presidents with retaliation if they voted Tarik in as National Coalition Chairman for another term, and the same if they did not vote in Bruce Maples??? Think about kids, “innocent until PROVEN guilty”.. Give these people due process, and if they are PROVEN guilty, then crucify them, but not until then. If Joe and company are allowed to circumvent the legal rights of those currently accused, what do you think they will do to you, who never had the position of leadership????

  • August 9, 2013 at 10:05 pm
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    Amen!! Workingboy…..

  • August 12, 2013 at 6:41 pm
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    Falcon-“I don’t understand that you indicated $3.3Million($275K by 12 month) was stolen by FZ. How come? I knew a very few store’s ANNUAL SALES are over $3million. If they stole $3.3Million per year, they should go to jail.”

    They stole $275K, not $3.3Mill, please re read my post. And yes, they should be charged with felony theft which is over $500 in most states.

    krishana says:
    August 8, 2013 at 2:15 pm
    Comment on fluffy’s remarks that one Fz is overriding price on cigarettes 1000 times.
    “Very Very hard to believe. 7-11 LP run reports every day for overrides.”
    Don’t know if SEI accounting is checking this better, but I saw this FZ overriding pricing on-1,000 cartons of cigs in 2 months myself through accounting reports in 2011.
    I almost had a heart attack when I saw how much this FZ stole. 7-Eleven didn’t even prosecute this FZ, or bother to get a promissary note. I quit shortly after that. No stomach to spend time policing FZ’s who feel they are “owed” money.

    Literally, &-Eleven was the worst company I ever worked for, unorganized, lack of resources, poor training, lack of capital spending on older stores, accounting issues, Sr. managers who only cared about themselves. Having said that, stealing or justifiying thefts due to poor mgt is not something I can live with.

  • August 13, 2013 at 8:54 am
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    Fluffy:

    As you wrote that “These thefts also had to be booked as inventory shortage- I’m talking $275K in ONE MONTH!!!! for 2 stores!!!! “. I re-read on your statement but my interpretation is same. You said $275K in ONE MONTH!!. $275K means $275,000. Usually the K was used in IT area. One K means 1024 byte.

    Anyway, you are lucky to quit 7-11. As you mentioned, there is no hope except Suzuki.

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