7-Eleven Franchisees Say Company Putting 30-Year Owner Out of Business

·3-min read

NCASEF Calls the Move "Retaliatory"

7-Eleven franchise owner Serge Haitayan received two noteworthy pieces of mail from 7-Eleven’s Dallas headquarters last month. One recognized him for his 30 years as a franchisee in Fresno, California. The other informed him that his days as a franchise owner were coming to an abrupt end. The corporation has refused to negotiate in good faith to extend or renew the lease on the store. On December 2, his 7-Eleven business will be shut down–ending his three-decade tenure.

Haitayan is among a group of franchisees who spearheaded a 2017 lawsuit against 7-Eleven for misclassifying him and other California operators as independent contractors. The case is scheduled for trial early next year.

"This is nothing but retaliation for my role in calling them out for unfair business practices. They’re willing to close a profitable store for 7-Eleven, with an established customer base store and a beer and wine license – even though there are no others available here – just to get me out," Haitayan said.

Under the franchise agreement, if 7-Eleven does not exercise the options on a lease, the franchise owner must be offered another location. In Haitayan’s case, the stores he was offered were not leased locations, meaning he would have to pay out of pocket to buy one. Haitayan says 7-Eleven violated California law regarding market withdrawal because he was not given six months’ notice that the company would not be exercising the option on his lease.

"I received a letter stating that 7-Eleven lost the lease on my store, which simply isn’t true," Haitayan said. "The property owner was approached just once last year about renegotiating or extending the lease, but then heard nothing over the last 10 months. This is just another example of how 7-Eleven abuses power and mistreats franchise owners who question their tactics."

According to Jay Singh, chairman of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), "Haitayan’s leadership roles in his local franchise owners association (FOA) and with the National Coalition were also the target of 7-Eleven’s mission to get him out of the system." California law protects the rights of franchisees to join independent associations of franchisees, but Singh said, "By making an example of Haitayan, 7-Eleven can intimidate other franchisees from actively participating in their FOAs and speaking out to defend franchisee rights."

Last year, Haitayan signed a 15-year franchise agreement with 7-Eleven. He still has 14 years left on that contract. "I’m the one who started this whole movement against 7-Eleven, insisting franchisees be treated fairly. Now they think they can get rid of me. I am not a store manager, employed on an at-will basis. I have worked hard as a franchisee to support the 7-Eleven brand and I’m going to fight until they give me comparable store."

About NCASEF: The National Coalition is a trade association for 7-Eleven franchise operators in the U.S. Originally founded in 1973, NCASEF is comprised of 41 separate independent Franchise Owner Associations collectively having more than 4,400 7-Eleven operators as members.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201026005900/en/

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Matt Ellis
Ellis Strategies, Inc.
matt@ellisstrategies.com | 617-278-6560