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7-Eleven embroiled in franchise dispute re discrimination

Georgia residents might not find it hard to believe that 7-Eleven may just be the largest chain of convenience stores on the planet. At last count, there were over 53,500 of the company's stores worldwide. Here in the United States, about 6,200 of 7,800 stores are part of 7-Eleven's franchise program.

Recently, a lawsuit filed by a group of franchisees and a west coast franchise owners' association claims that the company discriminates against franchise owners of a certain ethnicity. They claim they were forced to give up their stores in what is called a "churning" scheme by the convenience store giant. This refers to the allegation that the company is taking back franchises in order to sell them to new owners, thus receiving new franchise fees.

Supposedly, South Asian immigrants owned or own the stores targeted for this scheme. Further, they assert that the company invades their privacy, both in and out of the store. The company denies the allegations, and represents that the franchisees lost their stores due to activities that were illegal and/or against 7-Eleven's policies.

It will be up to a federal court in California to determine whether the franchise owners were discriminated against and/or the victims of some sort of churning scheme. When someone in Georgia buys a franchise, he or she is subject to certain conditions of the company. However, by the same token, the company also has certain duties to the owner. When either party allegedly breaches the contract or otherwise engages in unlawful discriminatory actions, the other party has the right to sue for both monetary and non-monetary damages.

Source: entrepreneur.com, "Franchisees Take 7-Eleven to Court for Alleged Racial Discrimination", Kate Taylor, July 24, 2014

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