7-Eleven, Inc. has settled its lawsuit against franchisee Kapoor Brothers, Inc. and Pursharth Kapoor in the United States District Court, Middle District of Florida, Orlando Division.
(UnhappyFranchisee.Com) While the terms of the settlement are not known, one thing is clear:
Pursharth Kapoor is out, and 7-Eleven, Inc. has his Merritt Island, FL franchised store.
According to the “Agreed Final Judgment”:
Accordingly, the Joint Motion for Entry of Agreed Final Judgment is GRANTED and it is ORDERED AND ADJUDGED that Defendants Pursharth Kapoor and Kapoor Brothers, Inc., their agents, servants and employees, and those people in active concert or participation with them who receive actual notice of this preliminary injunction, by personal service or otherwise, be and they ARE HEREBY PERMANENTLY RESTRAINED AND ENJOINED from directly or indirectly:
(a) Using or otherwise infringing upon any of 7-Eleven’s Marks, including 7- Eleven®, or any confusingly similar trademark, service mark, logo or trade name;
(b) Causing a likelihood of confusion or misunderstanding as to the source or sponsorship of Defendants’ businesses, goods, or services;
(c) Causing a likelihood of confusion or misunderstanding as to Defendants’ affiliation, connection or association with 7-Eleven and its franchisees or any of their goods and services; and
(d) Maintaining, operating, engaging in or having any financial or beneficial interest in a convenience store business located at: (i) 1105 Courtenay Parkway, Merritt Island, Florida 32593; (ii) 400 W Merritt Island Causeway, Merritt Island, Florida 32592; or (iii) the site of any former 7-Eleven store within 2 years of it last being operated as a 7-Eleven.
Read the Kapoor lawsuit complaint: 7-Eleven, Inc. v. Kapoor Brothers Inc. et al
Read the 7-Eleven/Kapoor: Final Judgment and Permanent Injunction
The Kapoor dispute is one of a seemingly growing number of sudden 7-Eleven, Inc. franchise terminations and store seizures.
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 alleged 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 alleged “at least one regularly employed person was working either without the franchisee having properly verified employment eligibility.
Some 7-Eleven franchise owners claim that 7-Eleven, Inc. is on a campaign to “clean house” and is targeting East Asian and Indian franchisees for expulsion from the system.
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