Has 7-Eleven Evolved Into An Employment Scam?

7-Eleven Franchisees are looking for an Attorney General who will ask 7-Eleven Inc. a simple question: 

How does a 7-Eleven Franchisee qualify as an Independent Contractor under 7-Eleven's new agreement and this State's Laws?

Here are the 1971, and red line version of the 2019 contracts.  Attorney Eric Karp red lined the major changes in the 2019 contract displayed here.

Has 7-Eleven’s  Business Model  evolved into an Employment Scam?

As Attorney Eric Karp explains the 2019 Agreement we can see what happened in Australia is being repeated in the United States.  Does the contract exceed the level of control required for “Independent Contractor” status?

Is Australia's Employment Scam Coming To America?

Do 7-Eleven Franchisees qualify as “Independent Contractors”?

7-Eleven Franchisees are worried that they are being forced into an illegal employment scheme with the 2019 agreement….  Franchisees plan to ask every state Attorney General:

“Is a person working under the 2019 agreement qualified to have the status of “Independent Contractor” under your state’s laws?”

Chat Room

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This Post Has 196 Comments

  1. What would happen if all of us did not sign until 11 p. m. on 12/31/2018? Have all of Corp. people have to meet us at our stores at that time. They cannot tell us we have to sign before that time. It is still before 2019 They want to give us crap, give it back.. Maybe, just maybe, by then we will have some relief if we all send our complaints to the A.G.’s all over this land.. I have never given up and I certainly will not now. I am hopeful that something good will come out of all the hard work John and Kathy have done, as long as we stick together. Come on people, let us show SEI what WE are made of. 7-11 is what they are today because of US, not them!!! So, let’s suck it up , stand tall dig in our heels and off to the WIN for us FZ S
    \

    1. Exactly as everyone has sense that the system will fall apart soon. The direction 7-Eleven is going, they will loose the franchise system to a point where nobody will acquire or interested in buying a store. Personally myself, I noticed the downfall after September 2001 and it is consistently falling down so as the personal income. Not even one franchisee would dare to have multiple store.

  2. The company knows it’s going downhill. It’s trying to get enough signatures from prospective franchisee’s to safeguard itself from the courts and bankruptcy. Just like when the banks were lending money fully aware that they won’t be held accountable for its predatory lending practices in the early 2000’s. The same thing is going on in 2018 with 7-Eleven. If any franchisee signs this contract and then breaks U.S. employment labor laws the corporation is not held liable. They are using franchisee to circumvent the labor laws and still make profits for themselves. Fully aware that the contract they are asking franchisee’s to sign are very close to impossible to turn a profit if run in a legit manner.

  3. The reason we have been put in this position is because franchisee’s have no unity, and have there own agendas, and are self motivated for there own personal gains, 7-11 knows we are divided and using this simple tactic to give us a unfair contract with minimal backlash. 7-11 needs to realize that Franchisees are the back bone of this business.

  4. Think Mitsui!!

  5. Time to get out. It’s a racket. 2004 agreement was bad. This one’s appalling.

  6. https://youtu.be/xPjCGDO4XmM.
    When hyperinflation hits the Franchisees with a 50 / 50 agreement might survive the Franchisees on a graduated split will absolutely not survive

  7. 7-Eleven Inc: Owned by Japanese its United States territory run by CEO: Joe DePinto. My big question to all this executives in Dallas office ” How could all of you in our Dallas 7-Eleven office, let Japanese become historical blood suckers in this land of Fairness & Opportunities”? Land of Justice becoming with 2019 contact Injustice?. Its shame for entire American nation. Japanese made already 500 times its invented dollars in America without investing back or improving its locations.Because of this foreign thieves Fed Reserves getting empty and American economy in big threat. what else this foreign investor 7-Eleven Japan wanted from its Tokyo, and all this guys are in Dallas working like robots. Shame Shame and Shame to all of your American’s in 7-Eleven Dallas office.

  8. I signed 50/50 split agreement when I entered in the system The inflation and minimum wages were in control but now I have given new agreement with Gross Profit split in favor of 711 with increase in inflation and increase in wages which is franchises expenses It is going to be very difficult to run this as profitable business and also goodwill of the store has been going down since 711 start charging very high franchises fee It is very one sided agreement which favor 711 and nothing for franchises who work very hard and give employments to local people

  9. Yes New aggrement is no good at all for Franchisee but Sei they don’t care if you don’t want then get out from system this is not good ethic specially when everything go up how franchisee going to survive we need help from stat and federal so some stop them

  10. “Those who fail to learn from history are doomed to repeat it.” Sir Winston Churchill

    Just as the British were able to enslave all of India, the Japanese owner of 7-Eleven is doing the same to franchises in the US. SEI is using misinformation and propaganda to break our unity and continue to subjugate hard working franchises.
    Thank you to all the franchises and our leadership that are fighting the good fight for every franchises prosperity. We must stand together!

  11. This is a toxic forced agreement, where franchisee is a hostage, SEI is telling us, you sign it or leave it. SEI wants to grab every dollar they can get to generate more income. An average franchisee will lose so much money that he will not be able to pay the employees well. A franchisee has limited money to pay for all the new expenses, liability insurance, increased wages, increase cost of running the business, local permits, SEI’s lopsided maintenance expense increasing year after year will cripple the franchisee. SEI has brought in new stipulations where all liability is on the franchisee. Instead of rewarding the franchisee to work hard, SEI is punishing the franchisee, as more we make the more percent SEI takes, without investing additional efforts. Most of the stores have old equipment and old floors, SEI has been milking the cash cow for years. The greed has exceeded so much that now SEI want our first born. There is already shortage of labor and it is hard to find workers. SEI demands to keep the stores in tip-top shape, hot food service and store cleaning require a lot of labor. I am lost, what to do as SEI does not want to listen, they just want to take advantage of the franchisee community, which has no say.
    Is there any regulation which can help we helpless people? There are few options left: 1) Sell or give up the stores 2) Don’t sign the contract as collective members and request SEI to change the contract 3) Go on strike till SEI listens and soften the new 2019 contract.
    Franchisees have invested 40 plus years to build the brand and SEI, does not consider any contribution by the franchisee community.

  12. Sei is pushing all franchisees to a serious move that will be a complete damage to the brand. Sei it’s not too late to listen and lower your EGO. We franchisees want to be your partners, but a fair partners. Stop all those FAKE parties of 2019 signatures. We all know the truth. Remember SEI, Our leaders tried and still are to sit and negotiate 2019 fair agreement. Please make a move and stop all the mess resulted of this horrible agreement before it’s too too late. Bilal Barqawi

  13. To all the franchises signing the new contract, You will regret it when your state minimum wage goes to $15. Let’s see then, if you still want to have cake with Joe DePinto.

  14. Market Managers lies to Franchisee: “ FOA presidents signs 2019 contact” it is 100% rumor & lies. “7-Eleven Japan”putting maximum pressures to Dallas inbehalf of 2019 contact. President of any any FOA have not signed contact up to today. By lies SEI Japan confusing Franchisees in entire USA. Please don’t trust that SEI saying . Don’t break our trusts in unites as 7-Eleven Franchisee in The United States of America.

  15. 7-Eleven Inc is not listening or considering franchisees interest that impacting new 2019 Contact. Please reach out your State and file a complain.

    here is link: https://employmentscam.com/Complaint/

  16. They control your employees by video taping them. They control your employees when a customer enter the store by greeting the customer to leaving the store. The following areas are controlled by 7-Eleven corp, Greetings guests, how much food to put, moping the floors, temp logs, face fronting, how much ordering, write off, plus sell, making coffee, price changes, pricing, cleaning of the equipment, products mix, maintenance of the equipment, venders, etc

  17. Sei took away everything from franchises
    Like gasoline money
    Credit card fee , advertising fee
    Since the sei introduce hot food and BT
    It increase the labor
    Hot good is totally failour model
    Fresh bakery is another failure model.
    All this since joe came .
    Joe is slowly tAking away everything from franchises
    2019 contract is total failure model .
    This model will never work
    Sei have to change the contract to
    50/50 split

  18. 79% of people looking at this website are on their cell phone 20% are on a desk top and 1% are on a tablet…. Is it harder to file a complaint on a cell phone? Do you think Franchisees are accepting their situation and simply won’t take action? And are there Franchisees out there willing to work together to file complaints together to increase there effectiveness?

    1. We are scared Mr. Irvine. They are making sure that we are very poor the next day they take the store from us. They are scaring us.

  19. 7-Eleven conducting false communications by saying in weekly information email that over 5000 franchisees are in the process of signing new 2019 contact. Field Consultants are force & told to make every franchisee to sing franchise agreement disclose from 2019 Contact, that Franchisee has received this book with 400/500 pages.Now 7-Eleven is confusing franchisees with false information’s and it is sad.

  20. Confusing Information below from my market weekly information, and 7-Eleven changing its time over and over for $1000 incentive because of failure amounts of franchisees signing 2019 contact. Best of my knowledge: 7-Elevens ex-employees become Franchisee 5%, that Ex Market Managers and Field consultants has break unity and in the favor of 7-Eleven Inc.

    Copy Of Market information below.

    2019 Franchise Agreement Reminders
    So far we have over 5,000 stores in some stage of the Agreement completion process.
    A few reminders:
    • We have discontinued the electronic FDD and Agreement request process. If you have not received a copy of your FDD or need a copy of the Agreement Request Form please contact your Field Consultant.
    • Franchisees that want to sign the 2019 Franchise Agreement must acknowledge receipt of the FDD then submit a request for their Franchise Agreement by September 21 to take advantage of the $1,000 incentive. Franchisees can take both steps today without creating any obligation to sign the Agreement. Then Franchisees must return a fully-executed Franchise Agreement by November 16 to qualify for the $1,000 incentive.
    • Agreement must be returned and fully-executed no later than 12/31 to qualify for the ‘rate lock’ incentive through 2029

  21. I believe that within 3 years the country will go thru a period of hyperinflation… If that happens no Franchisee on a graduated split will survive…..

  22. It is sad to see the direction this administration taking this company. If you noticed most SEI i.e FC’s/Managers they all trying to save their own ass and don’t really care about profitability and gross profit. They are like programmed robots and just repeat what they heard like a parrots. There is no business counselling anymore. Just sales pitches and documentations. It is one sided QV’s and documenting it just to use it against franchisees if they need to. No attention to resolve the issues but emphasize is blaming the franchisees even when it’s not franchisee’s fault. They do it digitally now but place for comments and explanation from franchisees. It’s all became a show. there is no professionalism left with this administration.
    I think franchisees need to collect all documentations and evidences to prove their false claims. I think their motive is to kick out all old franchisees and make money by turning over the stores. FCs are asking franchisees who are not due signing the contract to sell their stores. If we collect enough evidences that this company working in bad faith/unethical business practices, there could be a class action lawsuit in pipeline.
    I would suggest to all franchisees that protect yourself from false claims by saving all the documents, always respond to bad inspections and document visits/talk with FC’s. Y

  23. Mr Irvine do you have any update from any attorney General that you visited?

  24. If we do nothing out of fear..then nothing will happen but our demise as franchisees.. This contract is the absolute worst form of control over every aspect of the business.. Its is a ponzi scheme. an employment scam ..Forcing you to sign away any independence you previously may have had.. Churning is the new business model.. It is the only way SEI can survive.. They have not focused or cared about sales in stores for years… Never remodeling or replacing 40yr old equipment , forcing Franchisees to.pay for maintenance for equipment beyond any repairs, They continue to franchise stores that have mever made a dime for franchises..while using immigrants as pawns in their employment scam. Sitting back and not speaking up out is fearl is not going to do anything but justify SEIs Scheme.. SEI is obviously planning on this fear of them to further their scheme..

  25. https://youtu.be/iFDe5kUUyT0 Understanding how fiat currency works and why it has a lifespan that ends in hyperinflation is important to understanding why a graduated split system can’t possibly work over time…. Joe Depinto has an MBA degree and knows full well what is happening and what will happen in the near future…. We see countries like Greece, Turkey, Brazil, Venezoala, and Argentina, in some stage of monetary collapse…. We see countries like China, Russia, and India hording gold because after the collapse only gold backed money will be accepted by the people…. We have less then 4 months to stop this thing if you don’t help you are assuring yourself of your own doom!

  26. We have received a reply from every AG office that it will be looked into and they will get back…. The chance of success is in direct proportion to the number of Franchisees filing claims…. Joe Depinto is counting on you being to scared to participate…. Is he right?

    1. He is right. We came from poor countries where nothing to eat. Oppressive governments that talk and we have to listen. We have learned to be slaves since we were born. We will never speak up. We will never say no. He knows that we all will sign, one after the other. We are cowered!

      1. Most of 7-11 Franchisees have become sheeps and they have accepted slavery of 7-11. Market managers and FC’s could hit these sheeps with shoes or even spit on their face, these sheeps will smile and only ask if there is any store more avilable. Disgusting behavior by so called brave warriors. These sheeps expect someone else to fight for them while they are licking ….. for more stores.

  27. Just had a conference call with the Pennsylvania Attorney Generals office inquiring about our claim I think this shows that the more Franchisees who participate the more likely they are to proceed…. Government agencies will never tell you what they are going to do next…. So keep your fingers crossed

  28. If we get together. I MEAN ALL. And close our doors for 24 hours. See how quickly something will be done. We need to unit

  29. If we get together. I MEAN ALL. And close our doors for 24 hours. See how quickly something will be done. We need to unit

  30. If we get together. I MEAN ALL. And close our doors for 24 hours. See how quickly something will be done. We need to unit

  31. If we get together. I MEAN ALL. And close our doors for 24 hours. See how quickly something will be done. We need to unit

  32. If we get together. I MEAN ALL. And close our doors for 24 hours. See how quickly something will be done. We need to unit

    1. I Agree, but no FOA president is willing to do it. Closing our doors for just one day will bring us so much attention from our customers & Govt.
      one might loose one day sale but would you rather loose $25,000 to $40,000/year every year after signing this agreement? We the franchisees are just telling our issues to ourselves. We need to tell this to whole world. Closing stores for one day will bring TV camera & news media to your door steps for free. “Then you can tell your story” and everyone will listen including SEI.

  33. If we get together. I MEAN ALL And close our door 24 hours. See how quickly something will be done needs to unit

  34. Problem with many of our FOA leaders and presidents is that they talk big but when it comes to action they are mostly cowards. The only leader with real guts and actions I’ve seen so far is Mr. Jay Singh and John Irvine. Also, all those franchisees who supported them. These two are really worthy of respect. True leaders. Thank you.

  35. Most of 7-11 Franchisees have become sheeps and they have accepted slavery of 7-11. Market managers and FC’s could hit these sheeps with shoes or even spit on their face but these sheeps will just smile and ask if there is any more store available. Disgusting behavior by so called brave warriors. These sheeps expect someone else to fight for them while they are licking ……… for more stores. Many of FOA presidents became presidents to get more stores. what can you expect from these presidents ? Are these presidents signing any complaints ? Are they calling for local meetings to have a united drive to sign complaints ? Donkey presidents are preparing for national FOA elections but have no plan for Tsunami which is about to hit us ALL.

  36. This new agreement is very frustrating, person invested their life savings into this business hoping for a better future and with this agreement 7-Eleven is just taking everything away from us and leaving the franchisees empty handed. And shame on those people who are supporting these thieves to allow them to feel more stronger that they can do what ever they want and get away with it. Lets all stay together to fight back…………….

  37. “A FedUp franchisees” is right – Many of FOA presidents became presidents to get more stores. The KC “leadership” recommends signing the agreement, provided a “speaker” who is a corp operative, and reminds us about signing bonus. SEI is happy

  38. I think franchisees should demand action from their local FOA leaders/presidents and if they don’t deliver get rid of them or cancel your membership. Problem is most franchisees don’t participate and demand actions from their foa board. All those FOA presidents who are corporate ‘chamchas” need to be gone. At every membership meeting ask your foa board leaders to file complaints in writing with SEI upper management. It is FOA president’s job to do so. If presidents don’t do their job, get rid of those losers.

  39. A very small FOA in CA has president & VP who grew from 1& 2 Store franchisee to 9 stores. SEI offer them new stores exclusively. SEI is what East India Company used to be, they have Chamchas to torpedo any movement against SEI, leak SEI daily inside news about franchisee. No wonder chamchas have 8-10 stores each. But it’s all because we act like sheeps.

  40. No other franchisee in whole America charges franchisee fee of $400,000 or $500,000 for a brand new store without any sales history. Only greedy SEI does it and we the sheeps are to be blamed for keep paying this outrageously high franchisee Fee. Most of these franchisee borrow line of Equity against home, borrow from relatives etc, but where is ROI ?

  41. We are already selling gas for SEI for 1.5 cent commission per gallon. This is MODERN DAY SLAVERY. Minimum wage in CA is $11/ hr and you can’t find anyone to work for less than $12-$13/hr. Isn’t it slavery to force me to sell some thing for you which will cost me more to sell than what you are going to compensate me ?
    new agreement will break our back and change our relationship with SEI to a real slave. This Japanese giant must be stopped before it swallows us.

  42. Watching 7-Eleven for the past 47 years has been interesting to say the least…. We must give 7-Eleven credit, how many retailers that were around 47 years ago are still here? As we watch customer counts decline for the past 30 years the answer seems to be to shift expenses and take gross profit from Franchisees. We are reaching the point where 7-Eleven will not be a viable business for Franchisees. 7-Eleven began Franchising to avoid unionization…. 7-Eleven expanded franchising to lower their labor costs…. The indigenous population of the country gave up on 7-Eleven long ago…. Immigrants with access to labor pools unavailable here to for succeeded where the locals simply could not. As customer counts continued to decline the transfer of wealth from Franchisees to 7-Eleven had to continue for the company to survive. With the 2019 agreement we are simply riding the American version of 7-Eleven into the ground. When we compare 7-Eleven to other retailers such as Blockbuster for example…. 7-Eleven had a pretty good run… 7-Eleven like all retailers eventually end up in the history books as just a found memory!

  43. Couldn’t agree with you more John! It’s become a total racket. Give the few good stores out to FOA presidents or PLC members. In return the PLC members help 7-Eleven recruit new buyers for their unprofitable store’s. Watch the 7-Eleven media videos it’s the same few PLC members who were given high rent good store’s in return for selling the Brand. The FOA leadership does something similar. They play the game both ways. But in the end their interests are aligned with 7-Eleven and not the franchisees. What makes this a criminal investigation: is the fact how 7-Eleven deceptively sells it’s store’s by using these tactics to keep collecting franchisee fees from unwitting buyers. Those individuals that 7-Eleven preys upon pay the franchisee fee and then eventually leave the system losing years of their life with major debt. While 7-Eleven still parades itself as the best franchisee business due it’s rating on Entrepreneur magazine. Like I stated earlier what a “racket it’s become”

  44. CEO of McFonald’s Australia expresses shock at 7-Eleven Australia’s franchising practices – how different is 7-Eleven US from 7-Eleven Australia?

    I hear slot of noise about 7-Eleven churning franchisees here, too, and also making lots of money off it’s supply chains.

    “The three-legged stool’: McDonald’s recipe for franchise success
    By Cara Waters
    21 September 2018 — 12:29pm

    … Senator Deborah O’Neill asked Mr Gregory about evidence given to the inquiry by 7-Eleven of ongoing underpayment of staff in 7-Eleven stores.

    “This is an outrageous situation in Australia,” Ms O’Neill said. “How does the shame of the stories documented in this inquiry impact on franchising?”

    Mr Gregory said he was “really confident” McDonald’s employees were correctly paid.

    “We are also shocked by what we have learnt,” he said. “Some of the things we haven’t even thought of in the past. Our supply chain is completely independent of us making money from it. Adding margin for us has never been something we have even considered.”

    The three-legged stool
    McDonald’s operates 970 stores around Australia. Of those, 150 are company owned, which Mr Gregory said was key to enabling McDonald’s to understand the issues faced by its 260 franchisors.

    Mary Aldred, the chief executive of the Franchise Council of Australia, told the inquiry franchising was facing the “biggest crisis of confidence” the sector has ever seen but Mr Gregory said McDonald’s had faith in the franchising model.

    “McDonald’s believes in franchising,” Mr Gregory said. “Our way of doing franchising is best summed up by what we call the three-legged stool. McDonald’s is one leg, the suppliers and franchisees are the other legs. If one leg of the stool is not strong or not growing at the same pace or breaking, then of course the stool falls over and it fails.”..
    more at link – https://www.smh.com.au/business/small-business/the-three-legged-stool-mcdonald-s-secret-sauce-for-franchise-success-20180921-p5055i.html

  45. I have a question. If I file a complaint electronically with the California AG’s office, will my information be kept secret from SEI? Anyone has any input on this? I am willing to do it if my name is not made public.

  46. 7-Eleven INC does not cares for its Franchisee’s feature, Because 7-Eleven is a foreign investor turn to a Foreign invader in United States of America. If not, Why 7-Eleven Inc not making a equal deal with its Everyday working franchisee’s. That’s all I have to say.

  47. JOHN any updates from any of the Attorney Generals you visited?

  48. Amazon raised it’s minimum wage for all US employees to $15/hr, effective Nov 1st.

    This contract is a joke. Any franchisee still in the system will go bankrupt with these new minimum wage pressures, not to mention increased health insurance costs, increased CDC delivery cists, increased swipe fees, increased payroll processing costs, increased insurance liability costs, and increased maintenance contact fees and expenses, and all the rest.

    Corporate managers make more than we do. And they get benefits, and don’t have to pay for the priveledge of working there.

    We don’t even get fairly compensated for our time, never mind for the risks we assume, or a return on our investment.

    https://money.cnn.com/2018/10/02/technology/amazon-minimum-wage/index.html

  49. Should have said, we don’t make any more than a coprporate manager, after factoring in health insurance costs, vacation (that we can never take), sick days (the same), and 401k — and we work 20-30hrs/wk more.

  50. Contact your States Governor & also Federal Trade commissioner for each one of issue with 2019 7-Eleven new contact. Only Givernment can steps in because 7-Eleven Corporation will not make any change or amendment on new contact. You can also reach White House to The President of United States of America. Why we can’t have just an equal benefit & sharing that will make both Franchisses & 7-Eleven relation storng, trusted and caring. I am a Franchisee & presenting 7-Eleven brand to every guest, making profit and keeping company alive. That’s all I have to say.

  51. Contact your States Governor & also Federal Trade commissioner for each one of issue with 2019 7-Eleven new contact. Only Givernment can steps in because 7-Eleven Corporation will not make any change or amendment on new contact. You can also reach White House to The President of United States of America. Why we can’t have just an equal b befits & sharing that will make both Franchisses & 7-

  52. What’s the best way to sell? Do you use a broker?

  53. 7-Eleven began franchising in the 60’s to avoid unionization. Turning every store into an independent business assured that unionization was impossible. The downside of franchising was that control of the business was limited to maintain all important “independent contractor” status. 7-Eleven franchise contracts were just eleven pages long in the 60’s and 70’s. Embolden by the lack of enforcement 7-Eleven along with most other franchisors began expanding control. 7-Eleven’s 2019 contract is eighty-nine pages long and controls every aspect of the business…. A clear violation of laws that determine who is an “independent contractor” and who is an “employee”. Most Attorney General offices will advise the Franchisee to go spend millions of dollars and start a civil suit against a multinational mega corporation like 7-Eleven. Clearly the misclassification of employees belongs in criminal court. 7-Eleven Franchisees are looking for just one “honest” Attorney General who will simply ask 7-Eleven Inc. to justify calling Franchisees “independent contractors” under law. The answer may come back that 7-Eleven has a right to protect their image…. And we would agree…. However, that does not give them the right to miss classify their employees!
    For a complete breakdown of 7-Eleven’s 2019 franchise agreement by attorney Eric Karp and an example of a 1971 contract go to employmentscam.com. 7-Eleven Franchisees are praying that you are the one honest Attorney General in the country who will ask 7-Eleven Inc. to show you as a representative of law enforcement how a 7-Eleven Franchisee qualifies as an “independent Contractor.”

  54. @Exhausted. Yes, I would use a broker. They have a far bigger reach nationwide than the 7-Eleven online list. I’m on the east coast and some friend saw a 7-Eleven for sale in San Diego thru a broker email from there.

  55. *nods head*
    Thx, Burnt Out FZ

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