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7-Eleven Accused of Exerting Abnormal Control Over Franchisees

Five 7-Eleven Franchise owners file a lawsuit against the company


7-Eleven7-Eleven franchise owners in the New York and New Jersey areas claim the company doesn’t treat them like franchisees.

A lawsuit filed by five 7-Eleven franchise owners claims that they are treated more like employees. According to the lawsuit, “7-Eleven intentionally misclassifies its store operators as franchisees in order to increase corporate profits and avoid paying overtime, medical and pension benefits, FICA and other state and federal employer taxes.”

The lawsuit list several reasons as to why franchisees are more like employees including:

  • Regulation of vendors and product supply;
  • Processing franchisees’ payroll through its own internal payroll system;
  • Setting of pricing, advertising and promotional materials;
  • Intense daily oversight by Market and Zone managers of all store operations;
  • Requirement that store operators wear corporate uniforms;
  • All store bookkeeping and accounting done by 7-Eleven corporate;
  • Failure to pay overtime or other corporate benefits, such as pensions or medical, to store owners who routinely work 80+ hours per week;
  • Franchisee/store managers cannot withdraw money without corporate approval.
  • In many locations, store temperature is even set by 7-Eleven corporate in Dallas, Texas.

“When a franchiser exercises so much control over a franchisee, the relationship changes from that of franchisee to employee,” Jerry Marks, the plaintiffs’ lawyer, told The Huffington Post. “They work easily 80 hours a week, they do not get overtime, they do not get health benefits, they do not get vacation and they do not get pension benefits.”

This lawsuit comes shortly after 7-Eleven announced plans for an aggressive U.S. expansion.

Article printed from InvestorPlace Media,

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