New York, NY: Five 7-Eleven franchisees have filed an unfair business practices class action lawsuit against the mother company, alleging that they are so tightly controlled by 7-Eleven corporation they feel more like employees than business owners ??" and should therefore be paid as employees.
Filed in New Jersey earlier this week, the lawsuit alleges 7-Eleven controls the franchisees' stores including the interior temperature, product pricing and employee payroll. Furthermore, the franchisees need permission from the corporation to withdraw funds from their own stores' bank accounts, despite their having invested hundreds of thousands of dollars of their own money in their stores.
This results in the New Jersey based franchisees functioning like employees, even as they assume the financial risks of small business owners, according to the lawsuit. 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.
According to an annual report by Seven & I Holdings Co., the Japanese parent company, nearly three quarters of 7-Eleven' stores are franchisee-operated.
