Two South Jersey Franchisees Sue 7-Eleven

Published in CSP Daily News

Claim chain not keeping up with competition in their markets

CHERRY HILL, N.J. -- Two southern New Jersey 7-Eleven franchisees have sued the Dallas-based convenience store chain in federal court for allegedly failing to keep up with the competition--Wawa, reported The Courier-Post.

Sam Younes, of Cherry Hill, N.J., and Tamer Atalla, of Cape May, N.J., allege 7-Eleven has "failed to change its stores, products and marketing despite the ever-changing market and the expectations of consumers," said the report, citing court documents.

They also allege that sales and profits have fallen "due to the competition, and the lack of a response by 7-Eleven."

Younes owns two 7-Elevens in Cherry Hill and one in Pitman, N.J. Atalla's store is in Cape May County.

An attorney for the c-store chain, Kimberly Lippman of Cherry Hill, declined to comment for the newspaper on the suit, which is pending in Camden federal court. 7-Eleven Inc. has asked for the lawsuit's dismissal, saying it was not properly served with legal papers.

7-Eleven told CSP Daily News, "We will decline commenting because this matter is in litigation, and the comments made in the news article are no more than allegations."

7-Eleven is not dominant in the franchisees' local markets, said the report.

7-Eleven operates, franchises or licenses approximately 8,200 stores in the United States, more than10,000 7-Eleven stores in North America and about 50,000 stores globally. But the retailer does not have a significant presence in southern New Jersey.

The lawsuit says that Wawa, Pa.-based competitor Wawa Inc. has 595 stores in the Mid-Atlantic region (Pennsylvania, New Jersey, Delaware, Maryland and Virginia) and Florida.

"The convenience store business in southern New Jersey area has become dominated by a competitor of 7-Eleven," the suit said, most likely referring to Wawa.

Younes and Atalla, who each paid franchisee fees of about $100,000 to $150,000, allege that 7-Eleven is seeking to create conditions so hostile that the store operators will end their relationship with 7-Eleven, which would allow it to sell new franchises, the lawsuit adds.

Among other complaints, the franchisees allege that they are not allowed to adjust the sound of TV ads or the temperature inside their stores. They also contend that 7-Eleven is slow to perform maintenance, particularly for small or low-grossing stores.

Younes and Atalla are seeking compensation for lost profits, punitive damages and legal expenses, the Courier-Post said.