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.
ARE YOU A 7-ELEVEN FRANCHISEE OR FORMER FRANCHISEE? ARE YOU FAMILIAR WITH THE 7-ELEVEN FRANCHISE OPPORTUNITY AND CALIFORNIA AB-5?
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