7-ELEVEN Patel Franchise Lawsuit Alleges 7-11 “Storm Trooper” Tactics

(UnhappyFranchisee.Com) by Sean Kelly  A lawsuit filed against 7-Eleven, Inc. yesterday in the U.S. District Court for the Central District of California alleges that the convenience store giant is using “storm trooper” tactics to illegally seize valuable franchise rights from its franchisees in order to resell them for millions of dollars.

The lawsuit, filed by Marks & Klein, LLP of Red Bank, NJ and Schindler Law Group on behalf of long-time 7-Eleven franchisees Dilip and Saroj Patel, alleges that 7-Eleven’s aggressive Asset Protection/Loss Prevention team seized the Patel’s Riverside, CA franchise without warning as “part of a wider, nationwide 7-Eleven scheme to improperly intimidate and terminate long-term franchisees, with the goal of acquiring their successful stores.”

According to the lawsuit (Dilip Patel, Saroj Patel, and Saroj Patel, Inc., v. 7-Eleven, Inc., a wholly-owned subsidiary of Seven Eleven Japan Co. LTD, a wholly-owned subsidiary of Seven and I Holding Co., LTD.), “the sole purpose of acquiring these stores – albeit through illegal means – is to ‘take back’ the stores, at no cost, with the intent to ultimately re-sell the store, for a fee, to a third-party purchaser.”

“7-Eleven’s efforts to terminate franchisees and take-back stores have been tremendously profitable for 7-Eleven,” the suit alleges.

“…the amount received by 7-Eleven in reselling taken-back stores is in excess of ten million dollars.”

[Read more about the Patels here:  7-ELEVEN Stole Our Store – Dev Patel’s Story]

[Read about the stalking & harrassment lawsuit filed the same day as the Patels’ suit here:  7-ELEVEN Franchise Lawsuit Alleges Stalking and Harrassment of 7-11 Franchisee]

Complaint Recounts the Patel’s Harrowing Ambush by 7-Eleven “Asset Protection”

According to the complaint, Dilip and Saroj Patel have been the popular, community-involved franchise owners of the Riverside, CA 7-Eleven for nearly 19 years.

Their 27-year-old son Dev has been the hands-on manager of the store in recent years.

The suit alleges that on December 4, 2013, the Patels received a phone call that 7-Eleven wanted to meet with them at 10 am the following day to go “over some financials.”

On the morning of the meeting, Plaintiffs Dilip and Saroj, and their son, Dev, found that they had been lured to the meeting under false pretenses.

The suit alleges:

[The Patels] were met by 7-Eleven’s market manager for Market 2171, William Halverson.

Dilip and Saroj were then taken to a small room where they were surprised to meet 7-Eleven Asset Protection interrogators, Kevin New (“New”) and Steve Kellison (“Kellison”)   (collectively, the “Asset Protection Interrogators”), who immediately accused of them of fraud and wrongdoing with respect to couponing.

…Specifically, the Asset Protection Interrogators told Plaintiffs that the fraud being perpetrated  in  the  store  involved  the  excessive  use  of  Slurpee  coupons  and  that  Plaintiffs’ franchise, which they had for eighteen years, was being terminated and that 7-Eleven would be taking their store away that very day.

 

Further, the Asset Protection Interrogators told Dilip and Saroj that 7-Eleven would not give them an opportunity to sell the store.

This would result in Dilip and Saroj losing their store, which they had for more than eighteen years, as well as the goodwill associated with their well-run store.

When the Patels sat down at the table, Kellison’s first words were threatening in nature.

Specifically, Kellison stated that one of two things would happen that day:

  1.  the Patels would give up the store, including their equity, and pay 7-Eleven $100,000; or
  2.  7-Eleven  would file a federal lawsuit against them, individually and/or collectively, for $250,000.

The Asset Protection Interrogators further “advised” Plaintiffs that should they leave the interrogation room, that the lawsuit would be filed immediately.

The interview conducted by the Asset Protection Interrogators lasted nearly eight hours and was conducted using “Third Degree Tactics.”

7-Eleven Allegedly Refused to Furnish Proof or Allow Franchisees to Consult Legal Counsel

7-Eleven Patel LawsuitAccording to the complaint document and accompanying exhibits, Asset Protection interrogator Steve Kellison refused to replay the two short video clips that allegedly proved that the Patels were guilty of an ongoing “illicit, and calculated, scheme to siphon cash from the operation of the store” by fraudulently redeeming Slurpee coupons.

Kellison reportedly refused to show the video clips to Dev Patel, who was in charge of day-to-day operations of the store.

Kellison allegedly threatened the Patels with public embarrassment, especially in the Indian community, by publicly naming them as Defendants in a lawsuit.

Kellison allegedly “told Patel that if 7-Eleven filed the threatened civil action in federal court, the Internal Revenue Service (“IRS”) would likely hear about it, and that the Patels could face imprisonment.”

Asset Protection interrogators Kevin New is alleged to have “told the Patels that his mother used to work for the IRS and that the threatened lawsuit, and those like it, have ‘a way of getting out’ to the IRS… Upon information and belief, New’s mother was never employed by the IRS.”

According to the complaint:

At this time, the Asset Protection Interrogators demanded that Dilip and Saroj sign a purported “settlement agreement,” telling the Patels that their continued failure to do so would result in the lawsuit being filed.

At this point, Dilip asked if he could have twenty-four hours to confer with an attorney; however, the Asset Protection Interrogators refused.

Dev then asked if he could take the settlement agreement and federal complaint to his friend, Anthony DiBenedetto, who had just graduated law school, to review both documents.

7-Eleven denied the Patels’ request to go to Mr. DiBenedetto’s office.

…Scared  and  frightened,  the  Patels  were  still  unable  to  retain  counsel  that  was familiar with franchisees’ rights and/or franchise litigation.

Saroj, a diabetic, was especially intimidated and became very emotional.

Saroj became inconsolable and attempted to leave the premises.

In order to end the ordeal, and avoid the threatened litigation and/or retaliation, and to save his wife from a possible diabetic episode, Dilip – individually and on behalf of Saroj Patel, Inc.—was  coerced  into  a  signing  a  purported  settlement  agreement,  purportedly  requiring Plaintiffs to give up the stores.

The complaint alleges that, through nearly eight hours of coercion, threats and lies, 7-Eleven Asset Protection Interrogators succeeded in breaking down the Patels both physically and emotionally, to the point where they signed away assets it had taken the family nearly two decades to build.

Lawsuit Seeks Return of Patel’s Riverside 7-Eleven Franchise, Compensatory & Consequential Damages

The Dilip Patel, Saroj Patel, and Saroj Patel, Inc., v. 7-Eleven, Inc. lawsuit includes 5 counts:  Violation of the California Franchise Relations Act, Breach of the Implied Covenant of Good Faith and Fair Dealing, Fraudulent Inducement, False Imprisonment, and a Declaratory Judgement nullifying all settlement and termination documents.

Plaintiffs Dilip Patel, Saroj Patel, and Saroj Patel, Inc. demand a trial by jury and judgement against 7-Eleven, Inc. that includes compensatory & consequential damages, attorneys fees and costs, and the return of the Riverside, CA franchise store.

Read the complaint & exhibits here:

Dilip Patel, Saroj Patel, and Saroj Patel, Inc., v. 7-Eleven, Inc. [Complaint]

[Exhibits]

 

Also read:

7-ELEVEN on UnhappyFranchisee.Com [Index of posts]

7-Eleven Franchise Complaints

7-ELEVEN Stole Our Store – Dev Patel’s Story

7-ELEVEN Franchise Owner Claims Franchisees Are Being Bullied

WHAT DO YOU THINK? ARE YOU FAMILIAR WITH THE 7-ELEVEN FRANCHISE, 7-ELEVEN LOSS PREVENTION AND 7-ELEVEN LAWSUITS?

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TAGS: 7-Eleven, 7-Eleven franchise, 7-Eleven Asset Protection, 7-Eleven Loss Prevention, 7-Eleven lawsuit, 7-11 franchise, 7-11 Riverside CA, 7-Eleven litigation, 7-eleven franchise complaints, Dev Patel, Dilip Patel, Saroj Patel, Marks & Klein, Jerry Marks, Mark Stinde, Kevin New, Steve Kellison, William Halverson, Patricia Hollenbeck, Joe DePinto, Seven and I Holdings

19 thoughts on “7-ELEVEN Patel Franchise Lawsuit Alleges 7-11 “Storm Trooper” Tactics

  • March 19, 2014 at 6:10 am
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    Awesome. I pray the Patel’s get justice and Seven Eleven learns it can’t just use its “Asset Protection Team” as a modern day version of Hitlers “SS” taking away franchises where owners have put years of hard work and money into.

  • March 19, 2014 at 10:29 am
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    SEI will NEVER let a case go to a jury….they know they will lose. They only operate in the shadows and in secret…..evidence of dishonest dealings

  • March 19, 2014 at 1:56 pm
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    I was in that 7-11 on a daily basis getting my daily “goodies”. The Patels are the sweetest, kindest people you could hope to meet. I loved going inside. Thier greetings were so warm, sincere and friendly that ometimes it made my day! I believe every single word of what happened to them and it is so upsetting to think of them frightened and under duress. This family is just so gracious and kind. My husband enjoyed them the same way I did. Not only did our neighborhood suffer a loss losing them but so did the entire community. I pray the Patels get back what is rightfully thiers and that 7-11 is harshly penalized for thier behavior in this unjust event.

  • March 19, 2014 at 4:23 pm
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    This behavior is shameful on SEI……

  • March 19, 2014 at 7:32 pm
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    Kudos to the the Patels for standing up to the Corporate greed and evil that the
    parent company of 7-Eleven is exhibiting. I hope they get their store back and the jury
    awards them mitigated damages for the pain and humiliating ordeal the Patels had to endure

  • March 20, 2014 at 3:14 pm
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    7-11 is a Greedy bastard corporation

  • March 20, 2014 at 4:51 pm
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    I will pray to god dilip Patel and his family should get the store back from the clutches of 711 mafia. I believe they are the big robbers steal everything from franchise. 711 inc is still alive just because of the franchise hard work.

  • March 20, 2014 at 8:51 pm
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    These are tactics used by the Japanese ownership hopefully the government investigates and a FBI sting done on 7-11 corporation and arrest the CEO for being a criminal

  • March 23, 2014 at 12:13 am
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    This Patel family is hard working and sincere and honest people cheated by 7/11 corporation

  • April 24, 2014 at 10:48 am
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    major corporations like 711 always try and strong arm their franchisees and get more money from them. I am happy the patels got a lawyer I hope they win! hey 711 check out http://www.originalbakersdozen.com maybe you can buy pizza crust from us promise we wont be greedy.

  • August 21, 2014 at 12:45 pm
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    This story is likely far from the truth. I would suggest people look into Mr McCord’s junior experience and past history, which will likely consist of emotional instability, and integrity concerns. The Asset Protection industry is very small and Mr McCord was a junior player who in my opinion has a checkered past and a likely motive of wanting money from his employer.

    On the other hand I have know Mark Stinde the VP of Asset Protection for over a decade, and he has assembled a number of the best and brightest in the industry to rebuild 7-11′s Asset protection department, which in the past was largely known as retired cops working robberies.

    While I don’t know the facts, as an industry veteran I would suggest people not take what this disgruntled jr. Asset Protection person is stating as fact. I think research will show there is a personal motive being pursued by McCord.

    Don’t believe the hype… Look for the facts through the muddy web of untruth’s.

  • August 23, 2014 at 10:36 am
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    Hey Paul,
    Being an industry veteran does not automatically qualify you as an expert. Unless you have been in the 7-11 system, yours is just a layman’s opinion. In your statement you are clearly biased. The NEW & IMPROVED Asset Protection at SEI does NOT HELP the franchisees. It helps only SEI. I have personal knowledge with my dealings with this company and can tell you that they do pressurise FZs of high volume stores to just quit and FCs are ordered to document everything that might be wrong in the store. A smudge on the counter, a piece of gum out in the parking lot, etc. etc. This is how trivial their store walks have become. They all answer to the Asset Protection directly. They will never tell you how good your operation is, how the sales are improving, etc. They are forbidden to say good things about any store to their respective FZs. That in itself is a big morale deflator.

    As per your comment about McCord. You do not personally know him (judging from your comment) but you still went forward and hinted that he might be a gold digger.

    I think we should all hold ourselves to a higher moral and ethical standard when we pen something down or issue statements.

  • August 23, 2014 at 3:16 pm
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    Paul, speaking of gold digging how much are you being paid. Stinde is a hired gun that West Point brought in with promises of a huge ROI. Install the DVR and SEI will reap huge rewards……sales are in the toilet along with GP…multiple lawsuits….low morale…..nice work Mark!

  • August 23, 2014 at 10:01 pm
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    Paul.
    You and Stinde must of had a good conversation over lunch.
    Is he going to hire you?

  • August 24, 2014 at 6:45 pm
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    Lets see Google Mark Stinde and you find 20+ years as a professional asset protection executive. Successful companies like Circuit City and Sears are on his resume…..companies that either totally failed or are on the brink. Hey Mark gonna work your magic on SEI?

  • August 25, 2014 at 10:13 pm
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    PLEASE HELP US STOP THIS DEVIL SON OF EVIL JOE DE PINTO ‘SOB’ HE AND HIS EVIL TEAM AND POLICIES ARE TERRORIZING 7-11 FRANCHISEES ….PLEASE HELP US WE DO NOT WANT TO PAY COFFEE CAPTAINS IN THE STORE WE ARE BEING FORCED TO HIRE AND PAY FOR MORE LABOR UNDER 7-11 IMAGE DISGUISE BURN IN HELP JOE DE PINTO AND BURN IN HELL YOUR ENTIRE TEAM AND ASSET PROTECTION AND FRANCHISEE CHURNING TEAM

    7-11 the WORST WORST WORST WORST AND WORST DEVILISH ..MODERN DAY SLAVERY FRANCHISE EVER ………………………..IDIOTS ARE THOSE WHO ARE STILL BUYING INTO THIS SYSTEM

    NEW STINT THEY WANT COFFEE CAPTAINS FOR 2 HOURS IN THE MORNING IN EACH STORE AND SAYS THAT IT WILL TAKE ABOUT 2 MONTHS TO BREAK EVEN ON THAT EXPENSE BUT WILL SURELY HELP

    A***H**** THEIR FC”S AND MARKET MGR. DON’T HAVE TO PAY FOR THIS XTRA LABOR BUT FORCE THEIR FRANCHISEES TO MUST HAVE THESE PPL ON THE COFFEE BAR TRYING TO GET PERSONAL WITH CUSTOMERS WHEN THEY ARE BARELY WAKING UP AND HV MILLION THOUGHTS IN THEIR MIND AND PLANNING THEIR DAY AHEAD.

    THESE DEVILS AT 7-11 ARE FORCING THEIR FRANCHISEES TO HIRE EXTRA LABOR FOR 2 HOURS EVERY DAY THRU WINTER HOW DO FRANCHISEES MAKE MONEY

    DIE 7-11 BURN IN HELL N WITH YOU ALL YOUR STUPID TEAM… 1ST TO GO TO HELL THOSE JAPANEESE AND JOE DE PINTO THEN ALL THE MARKET MGR FC AND ASSET TEAM .

    I HOPE 7-11 CEASE TO EXISTS

  • August 25, 2014 at 10:19 pm
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    PAUL SHAME ON YOU…YOU SORRY SOB …GO LICK JDP’S B***S AND BURN IN HELL WITH SEI TEAM …..AND DONT FORGET TO GET THEIR FRANCHISE FOR YOUR ENTIRE FAMILY ….BEGINNING OF END OF YOUR KIND OF INHUMAN PPL …

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