7-Eleven Inc. Takes Over Several Chicago Stores

Published in CSP Daily News

Franchisees removed for allegedly violating terms of franchise agreements

CHICAGO -- 7-Eleven Inc. has taken over a number of convenience stores in Chicago from the franchisees, in some cases for allegedly selling nonapproved items, according to a report by DNAinfo Chicago.

One local operator said he was forced to relinquish ownership of four 7-Eleven stores in Wicker Park, Lincoln Park, Boystown and Lincoln Square. Another franchisee said the Dallas-based company took over his stores in Lakeview, Lincoln Park, Jefferson Park and Portage Park.

Franchisee Jay Rawal told the news outlet that 7-Eleven officials cleared his store's shelves on Friday of "the stuff they didn't want me to be selling," and security guards emptied his files into black trash bags, which they gave back to him.

Rawal said he was ousted by 7-Eleven because officials alleged he "wasn't running operation according to standards."

7-Eleven spokesperson Margaret Chabris issued a statement: "7-Eleven Inc. has terminated the franchises at those locations because the franchisees violated the terms of our franchise agreement. As a result, we assumed control these Chicago-area stores, and they are now open and operating under the management of 7-Eleven Inc."

Hashim Syed, a franchisee who publishes a newsletter for 7-Eleven's local franchise community, said the company's crackdown also has snared other Chicago franchisees. "[7-Eleven is] saying these franchisees were buying merchandise from outside vendors and not reporting to 7-Eleven and keeping profits themselves," he told the news outlet.

Syed called 7-Eleven's allegations "serious, but not proof. All we have is allegations, accusations."

Rawal admitted that he was selling certain noncorporate-approved items, such as certain soft drink brands, like Sunkist. But Rawal said he stocked the items at the request of customers.

Rawal also confirmed that pen-sized hookahs, which appeared for sale on the counter of the Wicker Park 7-Eleven last week, were removed in the inventory sweep and given back to him.

By late Friday, the 7-Eleven in Wicker Park had reopened with all new staff, said the report, although lottery tickets were unavailable for purchase because the license had been taken out in Rawal's name, Mark Kwasigroch, the store's new manager, told DNAinfo.

Kwasigroch confirmed that all of Rawal's employees had been removed from Rawal's stores Friday. He said he and other employees were transferred to the Wicker Park store from other corporate-owned stores.

In addition to 27 employees dismissed at Rawal's four stores, an additional 31 employees were laid off at four stores owned and operated by Frank Fatehali in August, Fatehali told the news outlet.

A 7-Eleven franchise owner for more than 15 years, he said the corporation took over his stores at the beginning of last month, forcing out workers at shops in Lakeview, Lincoln Park, Jefferson Park and Portage Park.

Fatehali declined to say why 7-Eleven took over his stores. His lawyer has been negotiating with the company to get his stores back, he said.

In recent weeks, takeovers also have occurred at three stores in Jefferson Park, Avondale and Park Ridge, Syed said.

Rawal said he was seeking compensation for his investment from 7-Eleven. Syed said he has heard that other franchisees who have lost their shops received settlements.