Is 7-Eleven using ICE to get rid of troublesome franchisees?
In January, the Immigration and Customs Enforcement (ICE) agency carried out raids at 98 7-Eleven stores in 17 states and in the nation’s capital. The action, which resulted in 21 arrests, drew attention because 1) it was seen as a demonstration of the Trump administration’s get-tough policy on illegal immigrants and 2) the outcome was not that great considering the cost involved in the effort.
New reporting from Bloomberg, however, suggests that maybe there was more to the story than was initially made public. Did 7-Eleven tip off ICE about illegal immigrants working at stores run by franchisees who were critical of the convenience store and its CEO Joe DePinto? Has this tactic become part of a bag of dirty tricks being used by 7-Eleven to stifle dissent among its franchisees?
According to Bloomberg’s reporting, tension between 7-Eleven and franchises has risen over the nearly 13 years since Mr. DePinto, a West Point graduate, has run the company. Under his leadership, 7-Eleven has become more demanding of its franchisees, requiring them to purchase more inventory, pay higher fees and comply with an increasing list of corporate requirements.
In the matter of illegal immigrants, 7-Eleven’s agreement with franchisees has specified that a franchise may be forfeited for failure to comply with all state and federal laws. While the company has denied that it had anything to do with the ICE raids in January, franchisees are doubtful, with some claiming that those targeted have had disputes with 7-Eleven.
Gurtar Sandhu, who operates four stores in Los Angeles County, was the only franchisee in the area, which includes hundreds of 7-Elevens, targeted in the ICE raids in January. Mr. Sandhu has been involved in two lawsuits against 7-Eleven in the past.
Bloomberg describes 7-Eleven using corporate investigators to tail franchisees in unmarked vehicles and plant hidden cameras and listening devices in stores. The company also, according to three officials at Homeland Security, provides tips on stores to immigration officials.
- The War Inside 7-Eleven – Bloomberg Businessweek
- Rights Groups Blast 7-Eleven Over Its Reported Complicity in Immigration Sweeps – Pacific Standard
- ICE 7-Eleven raids showcase new immigration strategy – USA Today
DISCUSSION QUESTIONS: Assuming Bloomberg’s reporting is accurate, has 7-Eleven has gone too far in “policing” its franchisees? How do you see the relationship between 7-Eleven and its franchisees compared to others engaged in franchised businesses?