Businesses have all sorts of different types of relationships. They have relationships with their employees, with their customers, with other businesses and, in some cases, with their franchisees. Each of these relationships can be complicated and come with a host of legal and business disputes. When one of these relationships falls apart, business litigation can arise.
This is what has happened between convenience store 7-Eleven and its New Jersey franchisees. Recently five New Jersey 7-Eleven franchise owners filed a class-action lawsuit in a New Jersey court. In the suit, the franchisees claim that 7-Eleven controls every aspect of their business so closely that they should be considered employees instead of franchise owners.
According to these business owners, 7-Eleven controls everything from how much they must work, to the temperature inside the store, to how much capital the business owners can withdraw from their stores and how much products must be sold for. Since 7-Eleven exerts this much control over the business, the owners say they are essentially employees of the chain, not true franchise owners.
Furthermore, the franchise owners complain that they must work upwards of 80 hours a week under these contracts, yet they are not paid overtime, receive pensions or have health benefits. They argue that since they are essentially employees they should also be receiving these benefits.
7-Eleven has not responded to the allegations made by the franchise owners.
Corporate disputes, like this one, can be distracting and time consuming for businesses. Often, repairing relationships can be as important as settling the actual dispute. By using alternative dispute resolution methods, people can find a resolution to their issues while trying to salvage important business relationships.
Source: JD Journal, “Franchise Owners Claim in Lawsuit 7-Eleven is Exploiting Them,” Daniel June, Aug. 2, 2013
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