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7-Eleven Franchisees Are Not Business Owners: NCASEF

The 7-Eleven franchisee association (National Coalition of Associations of 7-Eleven Franchisees, or NCASEF) once accused of selling out its franchisee members and making backroom deals with franchisor SEI (aka SlurpeeGate) is speaking out loudly against 7-Eleven’s push to support an amendment exempting franchises from California’s recently enacted AB-5 law.  In voicing its opposition, NCASEF states what few realize:  that 7-Eleven franchisees are treated like managers, not business owners, and aren’t even trusted to set their own thermostats.

(UnhappyFranchisee.Com)  It’s been a while since we reported on the complicated and disturbing franchise relationship between the franchisor of 7-Eleven (SEI) and 7-Eleven franchisees.  We have followed the controversies, but nt been actively reporting.

In fact, our last reports had to do with the heartless termination of long-time Riverside, CA franchisees the Patels, the controversial Las Vegas franchisee protests and our participation in the Australian Public Television’s expose of 7-Eleven worker and franchisee exploitation called ABC Australia’s Four Corners expose “7-Eleven: The Price of Convenience.” (UnhappyFranchisee.Com is featured at 24:28).

We were recently asked to share the National Coalition of Associations of 7-Eleven Franchisees’ (NCASEF) message of opposition to the proposed amendment excluding franchise companies from the California Law regulating independent contractor relationships, known as AB-5.  NCASEF’s press release is included below, and we’ve published National Coalition General Counsel Eric Karp’s video rebuttal here:  7-Eleven Franchisee Coalition Opposes a Franchise Exemption to California AB-5.

7-Eleven Operators Are The Least “Independent” Contractors in Franchising

7-Eleven is one of the least understood, most repressive and controlling franchisors in the world, and (with the possible exception of commercial cleaning/janitorial franchisees) 7-Eleven operators are probably the least “independent” independent contractors in franchising.

While we are not enthusiastic about spending an inordinate amount of energy explaining the details of AB-5, we welcome any opportunity to bring attention to the repressive and dictatorial nature of the 7-Eleven franchise relationship, and the absolute unwillingness (to this point) of CEO Joe DePinto and SEI management to negotiate a fair contract with franchisees.

Would-be franchisees of 7-Eleven should understand these points raised in NCASEF’s opposition to the amendment:

  • “7-Eleven operators are not actually independent contractors because 7-Eleven runs the stores…
  • “The franchisees own none of their own fixtures or equipment…
  • “[7-Eleven Franchisees] are not party to the lease for their location…
  • “[7-Eleven Franchisees] must deposit all sales receipts into SEI’s business bank account…
  • “[7-Eleven Franchisees’] payroll and tax obligations [must] be funneled through SEI…
  • “Franchisees are not even allowed to control the thermostats in their stores.”

7-Eleven may be the one of the only franchisors who have in-store surveillance 24/7 of their “independently owned” franchise stores and their supposed “owners.”

Here is the press release recently issued by the NCASEF:

As 7-Eleven Fights AB-5, Franchisees Claim the Company Treats Them like Store Managers, not Owners (Press Release) 

San Antonio, TX, July 6, 2020 – Having falsely claimed that a law intended to protect workers who have been misclassified as independent contractors – like those who drive for Uber – will make “franchising’s future uncertain in California,” the International Franchise Association and 7-Eleven, Inc. (SEI) are pressing to have franchised businesses exempt from the law known as AB 5. Unlike franchise owners in other well-known brands like McDonald’s and Planet Fitness, 7-Eleven operators are not actually independent contractors because 7-Eleven runs the stores; the franchisees own none of their own fixtures or equipment; they are not party to the lease for their location; and they must deposit all sales receipts into SEI’s business bank account.

“They treat us like glorified store managers,” said Jaspreet Dhillon, a Los Angeles area 7-Eleven franchisee and Treasurer of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), the independently elected body representing the interests of more than 4,000 U.S. franchises. “AB 5 represents a chance for 7-Eleven to change its system so that California’s hundreds of 7-Eleven franchisees could really be running their own businesses, but that is not what SEI wants.” Dhillon said.

California Attorney General Xavier Becerra has sued the ride-sharing companies Uber and Lyft, saying their drivers have been misclassified as independent contractors and should be employees of the company. 7-Eleven claims that its franchisees should not be covered by AB 5 and is attempting to persuade state legislators to grant a carve-out for franchising in the AB 5 law.  A similar effort by 7-Eleven to obtain a carve-out In Massachusetts failed.

On its website, the IFA says, “For franchisees, remaining in control of your own business is of paramount concern and could be jeopardized by AB 5.”

7-Eleven franchisees yearn to be in control over their businesses, but are not able given the oppressive nature of SEI’s franchise agreement, which, among other things, dictates that payroll and tax obligations be funneled through SEI. In fact, franchisees are not even allowed to control the thermostats in their stores.

In an email to all California franchisees, SEI’s Chief Franchising Officer Greg Franks wrote, “We are pursuing legislative changes to make clear that AB5 does not apply to franchising.”

The National Coalition opposes SEI’s effort.  Eric H. Karp, General Counsel for the National Coalition, called SEI’s campaign “a crass political attempt” to protect 7-Eleven from a major lawsuit that franchisees have brought challenging the company’s detailed and pervasive control over store operations. “The solution is not to change the law, but change the way SEI treats its franchisees,” he said.


7-Eleven Expose Sean KellyFRANCHISE DISCUSSIONS by Company

7-ELEVEN on UnhappyFranchisee.Com [UPDATED]

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

7-Eleven Franchise Complaints

7-ELEVEN: How the 7-Eleven Franchise Works

7-ELEVEN: Is 7-Eleven a Good Franchise to Own?



Contact UnhappyFranchisee.com

TAGS: 7-Eleven, 7-Eleven franchise, 7-Eleven franchise opportunity, 7-Eleven franchise complaints, 7-Eleven Franchisee Association, NCASEF, National Coalition of 7-Eleven Franchisee Associations, AB5, AB-5, California AB 5, Franchisee independent contractors, Eric Karp, Joe DePinto, 7-Eleven Inc., Witmer Karp Warner & Ryan, WKWR, unhappy franchisee, sean kelly, AB5 Franchise Exemption, Are franchisees independent contractors

5 thoughts on “7-Eleven Franchisees Are Not Business Owners: NCASEF

  • Unhappy franchisee

    Worst 3 years of my working life. I blame myself for not reading these comments more clearly and doing better due dillegence. Your better off investing in a index fund and going to get a job as a cashier. Less headache and your net worth will be hire by the time you get out. Golden years of franchising ended in the mid 80s. To much greed and franchisor got smart with there franchisees income. We win your dumb for not being more clever. There is to much overt control and aggression from head office. Give us your money and we will decided if your worth a damn to keep around. Find mistakes and violations if you Don’t do what I say . Misery loves company…. Welcome to 7-Eleven !

  • Singh

    Totally agree. 7-eleven is the.biggest liar . They deceive and dupe franchisees employees cities and states. There is a culture of corruption at 7-eleven top to bottom and we the people of southeast asia injected 711 with that virus called corruption . As lomg as you keep.on greasing the wheel.you are fine . But if you are a person of honor and principles they will get rid of you sooner or later .and you cant do anythimg to them even in the.courts .they are like mob. I feel there is no justice . The judges are from mars and they are more worried about procedures in the court but not dispensing justice . You see them in the court and.you see a medicine man . Same analagy ; you.will see how you never knew this secret ritual that would have helped youto save your case .well chap you are not a lawyer. It is written in this mystical law book in a section that has nothimg to do with your case .then comes interpreting the law .the judge tries to quantify things that you know are impissible to catch. Like intention ,pain .hostility.wrongful.good faith .
    Obligation.emotions.you will.be surprised how different the judge will paint the picture than what it was in reality. You can imagine it yourself by lookimg at recent judgement where judge concluded that franchisees are independent contractors instead of employees.that is the dumbest decision by the courts . People who gave that decision will sure stand in the hall of shame for such an outrageous decision .

  • Jason M. NORCO

    One thing that rarely has been spoken of is gasoline fuel pricing how the margins effect our stores and …. Our communities actually. If there are 3 or 4 7/11s in a given area say within 5 miles of each other which is typically how they operate, notice the fuel pricing is through the roof, margins as high as 62 cents ! Holding not only the Franchisee hostage but the entire area. Quite similar to price gouging actually, the Franchisee only takes home 1.5 cents, stores sales are substantially lower for the entire area, people shop around for fuel and have been doing this since 2002 at least. Now with apps they would drive further towards there work or home whatever, and get fuel, snacks etc in another area. Now they’ve purchased more fuel stores I’m certain gasoline will be higher than ever next year.

  • Thank you for pointing out that franchisees are not owners. There are so many consultants and sales people in the field to live off of the franchisees that it is sad. However, why it is not being stopped is somewhat explained in the book: “Small Business Skills” by Bobby Harman. Couple of more books that I found could be of help are:
    “Dunk’d” by Barkan- lots of information but hard to understand by a newcomer
    “Franchising and Racketeering” by McMullin- unfortunately the core information is diluted by bad marriage complaints.

    Thank you for hosting and sustaining this informative discussion board

  • Remmy bhatia

    I find and compare 7 eleven to East India Dutch company. A master class of executives who are modern day slave owners . you as a franchisee can never fight this giant because they keep corrupt judges in their pockets. How can a judge understand the case if he hasn’t spend more than 15 minutes in 7 eleven store throughout his life. When you walk into court you actually walk with so many assumptions , first you assume judge is honest 2 u assume that magically judge knows what franchisees life is like 3 judge has 0 bias 4 judge never feels professional fatigue 5 judge is expert in understanding all pertaining issues from complex accounting to merchandise adjustments from gross profit to minimum net worth. 6 judge is there to dispense Justice. 7 all the decisions judge has given in his life were correct . That is a lot of assumptions you have to make regarding one mortal man who is judge not because he was extraordinary or brilliant but because he knew some governor or president. And most likely shared identical ideology and made huge donation to their campaign fund. Think again what are your chances of winning against so Many assumptions The 7 eleven opening at every corner is a reality made possible by stolen , blood and sweat money of franchises. 7 eleven being a modern slave owner is one thing but lot of blame also goes to your own brethren , position holders in FOA , they are equally responsible for such pitiful situation. They have multiple stores , they are corrupt to their core and they work hand in hand with 7 eleven management selling your rights everyday. They are ruthless and they have no moral issues selling franchisees interest just like they sold their own souls to the devil. So I can’t hope any better days for 7 eleven owners because you are being tugged from front and back. They got you by the balls. And you can’t do shit to them and help is not on its way. I hope you have already gotten use to it . That’s the best I can think You know I am not lying. Scars don’t hide.

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