Aug 03, 2013 11:26 AM EDT
Franchise Owners File Class-Action Lawsuit Against Corporation

A class-action lawsuit filed by a group of five 7-Eleven franchises are claiming that the corporation is monitoring their stores so tightly that they are treated more like employees rather than owners, and thus should be paid as such, according to the Huffington Post. 

The lawsuit filed by a New Jersey court this week,claims the company is making it difficult for owners to manage their store. The operators say 7-Eleven corporate controls their stores from the interior temperature, product pricing and employee pay. 

The suit claims, the franchisees are not able to withdraw funds from their stores' accounts without permission from corporate, despite investing hundreds of thousands of dollars of their own money in those stores. 

Although they hold the responsible to being a small business owner, the suit claims they're treated like employees. 

"When franchisors 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."

According to the Sarah Leberstein, a staff attorney at the National Employment Law Project, if a court finds the lawsuit to be true, 7-Eleven could be a part of a larger trend, of fast food chains keeping a tight grip on their franchise stores. 

"The fundamental questions should really be whether or not the franchisees are truly in business for themselves and running their own businesses," Leberstein said. "In a lot of these cases, the companies are putting the financial burden on the franchisees without giving them a level of Independence. Not really  calling the shots and they're not using their investment to turn a profile."

According to the Federal Trade Commission, a typical franchise relationship, the franchise pays the company's fees and gives some assistance with things like finding a location and running the store successfully. 

Nearly three-quarters of 7-Eleven's United States stores are franchise-operated.

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