FTC Commissioner Headlines 45th National Coalition Convention
Rohit Chopra Acknowledges Concerns Among 7-Eleven Franchisees
San Antonio, Tex., Aug. 11, 2021– FTC Commissioner Rohit Chopra, who questioned the legality of 7-Eleven’s $21 billion purchase of 3,900 Speedway gas stations and convenience stores and has promised to “safeguard operators of franchised businesses from abusive practices by franchisors,” addressed members of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) on Aug. 4 during the group’s convention in Orlando.
Under Chopra’s leadership, the Federal Trade Commission has been soliciting comments on the Franchise Rule that enforces laws prohibiting unfair business practices. For several years, NCASEF has been voicing its concerns over the way SEI exerts control over its franchise owners. Recently, Rep. Jan Schakowsky (D-IL), who chairs the House Consumer Protection and Commerce Subcommittee, called for a Congressional probe of the Franchise Rule.
Owners of franchised businesses do not have the right to file private legal action against a franchisor for violation of the Franchise Rule, which means they must rely on the FTC to protect their interests.
“It is refreshing to hear Commissioner Chopra’s commitment not only to enforcing the Franchise Rule, but also expanding the rule to include the substance of the relationship after we buy in. Most of the time, bad things happen after franchisees sign their franchise agreement,” said Jay Singh, National Chairman of NCASEF, an elected, independent body representing the interests of more than 7,400 7-Eleven franchised locations in the U.S.
Chopra’s talk was facilitated by Keith Miller, the principal of Franchisee Advocacy Consulting and a Subway franchise owner, who also addressed the convention. He said attendees were pleased to learn Chopra was aware 7-Eleven franchisees are not guaranteed the lowest cost of goods from the franchisor-controlled supply chain because 7-Eleven, Inc. (SEI) accepts money from vendors.
“The message to franchisees was that greater scrutiny will reign in some of 7-Eleven’s practices, whether they make changes on their own or they are forced to do it,” said Miller.
The FTC’s consent order allowing SEI ownership of Speedway required SEI to divest 293 of its locations. But Chopra told the National Coalition he remains concerned the deal may still be harmful to consumers. He also acknowledged to franchisees that the FTC is closely monitoring investigations by other jurisdictions, both in the US and around the world, into SEI’s parent company.
“Based on what we heard from Commissioner Chopra, 7-Eleven franchisees should be hopeful the playing field could soon be leveling,” said Singh.