A 7-Eleven franchisee of more than 40 years brought claims that the convenience store franchisor engaged in a region-wide scheme, dubbed “Operation Philadelphia,” to force older franchisees to terminate their franchise agreements. The franchisee claimed 7-Eleven acted to enter into agreements with new franchisees on more favorable terms. A federal district court dismissed several of the franchisee’s breach of contract claims, but let some claims go forward.

The franchisee claimed 7-Eleven breached two franchise agreements several ways. He claimed 7-Eleven imposed unreasonable charges, interfered with store management, conducted unfair audits, failed to market the franchise and failed in its obligation to negotiate the lowest cost for products.

A breach of contract claim that survived dismissal was that requests to 7-Eleven to fix a leaky roof and potholes in the franchisee’s parking lot were ignored. The franchise agreement said 7-Eleven would repair the roof, parking lot, exterior walls, floor coverage and foundation “when considered necessary.” The franchisee alleged that he notified 7-Eleven of the need for the repairs, leaving for later determination what constituted a “necessary” repair.

The court also allowed a claim to go forward that 7-Eleven failed to treat the franchisee as an independent contractor by forcing him to sell products he did not order, interfering with management of his staff and communicating directly with them. 7-Eleven argued that it was not obligated to treat the franchisee as an independent contractor, just that the franchisee was obligated to hold himself out to the public as such, exercise his own full control over employees, conduct day-to-day management and adhere to other aspects of independent contractor status.

Finally, the franchisee alleged 7-Eleven failed to give written notice of its decision to impose credit card transaction fees, and, separately, that these charges greatly increased and diminished his profits. The lack of notice claim survived dismissal. But there was no allegation that credit card fees were calculated contrary to the formula in a credit card amendment to the franchise agreements, or that the fees exceeded amounts charged by credit card companies or otherwise breached the agreements. For this reason, the court prohibited the franchisee from pursuing any claim concerning the amount of credit card fees charged, noting that the significance of such a failure remains to be seen.

“Operation Philadelphia” was ultimately whittled down to specific claims. Franchisees alleging breach of a franchise agreement can benefit from not over-pleading their cases, but focusing on meritorious claims and provisions for which there is evidence the franchisor actually violated.

Read: Takiedine v. 7-Eleven, Inc.