Man with grudge against 7-Eleven opens 6-Twelve across street in South Boston

You see it in every industry. Good luck to this guy.

The reason people like stores with recognizable brands is that they know what to expect whenever and wherever they visit. That's why thousands of store owners pay the fees and accept the terms. I'm going out on a UHub limb and admit that I like and look for the 7-Eleven brand. I wish they were more like the stores of their Japanese owners' homeland, with more healthy food and diverse services, but they're getting there. If you want to own or patronize a 6-12, go for it (until the lawyers make the store change its name), but don't call it a 7-Eleven and refuse to deliver its services.

Unrealized by many franchisees when they enter into an agreement with their corporate brand owners, is the scope of control the parent company has over the individual operator.

Seven - Eleven is hardly unique. Dunkin Donuts is notorious for its bad relationships with it store operators. Typically the parent company gets a signicant portion of the individual store's top line revenue simply because it owns the brand name (5+ %) is not unusual).

The parent company incurs little or no expense but has domain over all activities that do or may incur in the future. They control what products are sold, what are introduced or what are discontinued. The also charge the franchisee for a prorated portion of corporate's operating expenses and costs (e.g. Accounting/Finance, Legal, procurement & Distribution, HR, Marketing, New Product Development, etc.). The franchising in turn has no input or say so about any of the decisions arising from those functionalities. They can't set prices, run their own sales promotions or engage in independent procurement. More over, if they have business situations that require expertise, they are on their own as they are not allowed to utilize any corporate admin services in the operation of their individual businesses.

There are 2 key examples of how this impacts the individual operators:

Let's say the operator has a product that sells well, has good margins and is popular with customers. The parent company decides (because the product doesn't do well in other regions of the country) it no long wants to carry the product - they inform the operator not to sell it any more - the operator takes the financial hit & has the customer relations issues to deal with. If the operator continues to sell the product, he has breached the franchise agreement and could (often does) incur sanctions and penalties.

Another example (which can has enormous impact on an operator) is when the parent company decides introduce a new product. Food products are particular onerous on the operator because the franchisee is charged for the prep equipment, training costs, etc. associated with selling the new product and pays any associated labor costs. If the product does not sell, too bad for the operator.

Dunkin Donuts hot sandwich offerings were generally a disaster for franchisees...often the convection cooking equipment cost in the $10's of thousands, required additional labor, maintenance and so on. Eventually DD backed off on some of the products because of a lack of consumer interest but the franchisee...too late for the operator because he already took the financial hit. Look at what happened to McDonalds - home office decided to sell burgers for a $1 each - franchisees got murdered in the process often barely breaking even on this promotion.

My observation and experience working with operators has been that inevitably they probably are better off running their same business as an independent, autonomous entity.