Convenience store chain 7-Eleven is being accused of fraudulent business practices related to not properly claiming its workers as employees and other unethical practices, such as manipulating franchise agreement terms and discrimination against Asian and Middle Eastern franchise owners. These accusations come at the same time the company is under federal investigation for human trafficking in Virginia and other states. According to an attorney representing the franchisees, there are currently 60 people who have joined in the lawsuit and there are hopes of taking the litigation nationwide.
Franchisees in the lawsuit report that, based on the nature of their relationship with the corporation, they are actually employees and should be receiving benefits as such. According to franchisee claims, 7-Eleven controls much of the daily operations of its franchise locations. All accounting and payroll, vendor selection, product pricing and even temperature control is done at corporate headquarters. Attorneys in the case say that the company calls franchisees "independent contractors" to avoid paying for employee benefits such as workers' compensation, health insurance and tax withholding.
While the spokeswoman for 7-Eleven declined to give a statement, the lawyers handling the case are confident that they will be able to prove that the company's franchisees are actually employees. If this happens, the corporation will have to refund the franchise fees and pay overtime wages, medical expenses, pension and interest. The company will also face the consequences of violating securities and other laws.
When dealing with breach of contract or other business disputes, it may be beneficial to seek the advice of an attorney familiar with Virginia business and commercial law. Lawyers with such experience may be able to help determine the basis of a potential lawsuit and what amount of compensation would be appropriate.
Source: Blue MauMau, "7-Eleven Sued for Representing Itself as Franchisor", Janet Sparks, August 01, 2013