The National Coalition of Associations of 7-Eleven Franchisees (NCASEF), along with another group, is calling for the Federal Trade Commission (FTC) to investigate the convenience store giant and several other companies due to their franchising practices.
The NCASEF, with Franchisee Advocacy Consulting, filed the petition with the FTC requesting for it to investigate 7-Eleven Inc., Subway, The UPS Store Inc., IHG Hotels and Resorts, Choice Hotels, Experimax/Experimac, Supercuts, Massage Envy and Dickey’s Barbecue Pit, the coalition announced Tuesday.
The groups allege the companies have hurt franchisees in favor of franchisors.
“But for all too many franchisees, the promise of entrepreneurial success gives way to shockingly one-sided franchise agreements and unilateral decision making by franchisors, building a relationship which looks much more like investing in an employment relationship than an arm’s length business partnership,” the petition states.
The companies have allowed franchisors to put the legal and financial interests of franchisees aside, the groups say, and they want the FTC to make the companies provide information for 115 requests in 14 categories related to the issue.
The request for information would include the companies' supply chain, advertising funds and financial performance representations data.
“This petition provides the opportunity for the FTC to take a proactive role in assessing the franchise industry,” Keith Miller from Franchisee Advocacy Consulting said. “We are requesting the FTC look broadly at the imbalance of power in our industry today.”
7-Eleven said it will work on any requests with the FTC, and boasted about the success of its franchisees.
“This year, 7-Eleven Franchisees are experiencing the strongest increases in sales, margin and gross profit performance in over four years. Less than 5% of stores turned over in 2020, which is consistent with our standard turnover rate for the past 10 years," the company said in a statement. "Since the start of the COVID-19 pandemic, we have provided more than $185M in incremental support for Franchisees as they continue to serve their customers and communities."
Updated at 11:29 a.m.