SAN ANTONIO, Texas--(BUSINESS WIRE)--Members of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) are pressing lawmakers to strengthen federal oversight of franchising to ensure independent operators of franchised businesses like convenience stores and quick service restaurants are not subjected to contractual terms that are inherently unfair, unconscionable or potentially predatory.
“Our message to Members of Congress is that the playing field is slanted in favor of franchisors because of the heavily one-sided way franchise agreements are written. These franchise agreements reflect the overwhelming imbalance of contractual and financial power wielded by franchisors. We believe that the Federal Trade Commission’s Franchise Rule needs to be strengthened in order to better protect the interests of men and women who invest in buying a franchised business,” said NCASEF Chairman Jay Singh, who was joined in Washington last week by members of his executive board and by franchise owner association leaders from around the country.
NCASEF is an elected, independent trade association representing more than 7,000 7-Eleven franchise owners in the U.S. Its leadership met with senior staff members of the House Education and Labor Committee and with their home-state congressional delegations. They detailed ways 7-Eleven Inc. (SEI) treats its franchisees as employees instead of owners, and asked lawmakers to examine whether the agreements franchisees sign with SEI more closely represent an employment contract than a franchise agreement. They also shared concerns of franchisees in Japan, where a shortage of service labor has created friction over keeping stores open 24/7 because franchisees are being pressed to work over 100 hours a week, or close overnight and violate their franchise agreement. Many are concerned the U.S. labor shortage could lead to a similar situation here.
Franchisees also produced a landmark 326 page report from Australia’s Parliamentary Joint Committee on Corporations and Financial Services, which detailed instances of franchisor abuse in that country by 7-Eleven and other major brands. It highlighted that presale disclosure alone had not been successful in addressing opportunistic behavior by some franchisors.
“We have many times reached out to our franchisor in an effort to establish a good faith dialogue based on mutual respect and transparency, but, unfortunately, we have not seen a positive response,” Singh said.
“We believe we can make real progress to better balance the franchise relationship when we go in and explain to Members of Congress and their staffers how our business works. It is important for them to understand we are the ones who invest in local communities, provide jobs and pay local taxes, not the brands themselves,” said NCASEF Vice Chairman Michael Jorgensen, adding the National Coalition will continue holding their May board meetings in Washington so they can provide updates to lawmakers.