The War Inside 7-Eleven | Hacker News Reader

The War Inside 7-Eleven

bloomberg.com

111 pointsrobg114 comments

While there seems like a desire to blame 7-Eleven here, they are completely right to not want to have their franchisees violating federal immigration laws. While they are insulated by the contractor-contractee relationship, the government is humourless about these sorts of things. The violations are easy to prove (either you have proper employment documentation or you don’t) and enforcement is politically popular. That’s a bad combination from a corporate risk management point of view.

Sounds like immigration is gonna be this generation's "War on Drugs"

Not a lot of good solutions. Can't let everyone in. No one cares for merit based immigration like other countries (ie Canada) because pro-immigration supporters want others than the best to have a shot, and no one wants quotas because it'll clamp down on immigration from countries with large populations (China and India).

The US was founded on immigration.

> Can't let everyone in.

Why not?

Because it breaks your economy and social fabric (super simplified for the sake of fitting a decent reply into one short HN comment). We're at the lowest level of unemployment in decades, and wages are barely moving up. Bringing in large amounts of unskilled workers (remember, skilled workers get in on merit) would only delay wages rising (or those unskilled workers are going to be working under the table in jobs like slaughter houses, dairy farms, and other hazardous work environments where they will have no recourse when they're injured or maimed). Some immigrants want to integrate with American society, but not all (and that is what is expected of you as an immigrant, to share and hold our values in the same regard citizens do).

Europe has had its fair share of troubles with economic migrants. This isn't about race, this is about economic systems and the social stability of your host country. I support an immigration pipeline that gets skilled workers into the US as fast as possible (most especially in the healthcare field), but that's not what's on the public policy table.

Immigration is at generationally low levels, I don’t see how you could blame it for lack of wage increases. What about the stagnant minimum wage, record corporate profits or union busting; might they play a role? “American society” and “our values” are by-products of immigration, how would more immigrants ruin that?

> What about the stagnant minimum wage, record corporate profits or union busting might they play a role?

I don't discount that these are major contributors to the problem. Adding additional labor supply, supply willing to work for almost nothing, does not help the problem.

Growing the pie has always helped everyone in America. Is there something that has fundamentally changed in your view to alter this trend? Are there Americans out there who want to do these types of jobs?

The pie hasn’t grown for four decades [1], and the middle class has been hollowed out [2]. The existing system must be fixed before more burden is placed on it.

A job not being filled in no way validates that someone should fill that job. Some jobs should not exist (anything where life and limb is constantly in significant peril, for example). We don't throw our hands up when we can't find workers to clean up nuclear waste accidents. We build robots for the job.

[1] https://i.stack.imgur.com/iCTuo.jpg

[2] https://www.npr.org/sections/thetwo-way/2015/12/09/459087477...

==The pie hasn’t grown for four decades [1], and the middle class has been hollowed out [2]. The existing system must be fixed before more burden is placed on it.==

Your first chart doesn't show a stagnant pie, looking at GDP numbers disproves that theory. The pie has absolutely grown, corporations have just chosen to keep more of it.

The problem is that you are connecting these things directly to immigration and there isn't much evidence to back that up. You are taking a real problem (stagnating wages and fewer corporate profits going to workers) and shoehorning in an ideological belief to explain it. Your sources provide no evidence that immigration is to blame for either of these phenomena. They simple show that the phenomena exists.

==We don't throw our hands up when we can't find workers to clean up nuclear waste accidents. We build robots for the job.==

Wasn't your entire point that we are just hiring immigrants to do this work instead of building robots (your Wisconsin dairy example)?

> The pie has absolutely grown, corporations have just chosen to keep more of it.

Then the pie has not grown. You're simply advocating throwing more people on an already broken system.

> Wasn't your entire point that we are just hiring immigrants to do this work instead of building robots (your Wisconsin dairy example)?

My argument is that automation should be prioritized over subjugating illegal immigrants who have no recourse. Dairy farmers cannot afford to pay a legal wage, therefore automation is their only option if ICE shows up and prevents them from hiring illegal immigrants (the fact that the dairy industry is hideously broken and needs to shrink dramatically is a topic for another thread). I am pro-immigration when properly implemented, but staunchly anti-abuse of all people.

But we're not talking about illegal immigrants who have no recourse here. We're talking about opening up immigration so that these people, and others, can come in and do these jobs that as of now only go to illegals, while also receiving the benefits and protections that come as a legal immigrant. That seems to be exactly what you want, so why are you against it?

I feel that I have sufficiently explained my thesis through my other comments.

> Then the pie has not grown. You're simply advocating throwing more people on an already broken system.

I'm not sure where you get this idea, but the growth of US GDP is evidence that the pie has grown. The reality is that corporations are keeping a larger percentage of that pie than ever before. The two are not mutually exclusive.

Secondly, I am not advocating for anything, I am just trying to understand your stance.

I'll give you a firm example. I'm close to a town of 20,000 in rural Minnesota, and the biggest employer is a well known turkey company. Their plants used to be staffed with primarily native (and being in Minnesota, white) people. It was menial, hard labor but it paid well because of that. By the 90s the plant was primarily staffed by illegal Mexican immigrants, and now it's almost entirely Somalians.

The jobs are repetitive, mindless, and it's cold, wet, and loud in there. The pay is barely above minimum wage. If the company didn't have access to those immigrants that are happy for any work at all, they would have been forced to raise those wages long ago. If people in the plant were paid, say, $15 an hour, the hourly workers in the office next door sure wouldn't be happy being paid the same amount. Their wages would have to be higher, which would mean the salaried folks would also want to be paid more.

That town is a perfect microcosm of how the massive amount of immigration our country has seen has kept wages stagnant.

Why would the 15 an hour office workers care? And quite frankly if that makes them unhappy, they are free to find employment elsewhere. They were clearly fine with the pay previously, why should it matter what someone else is making. That just reaks of elitism

Except the problem with that story is that immigrantion is apparently lower now than ever, and the biggest problem is that many americans strongly prefer not to do that kind of work.

You still haven't proven that immigration is the cause of this particular wage stagnation. You want to believe it is, but you haven't given evidence.

Is there proof that non-immigrants even want to do this work? The well-known case from Georgia suggests they don't. https://www.forbes.com/sites/realspin/2012/05/17/the-law-of-...

At the same time, couldn't the state just raise the minimum wage?

He says they used to, but wages didn't keep up.

Immigration hasn’t kept up either, so how can it be the driver?

Why do you think it hasn’t kept up? Perhaps legal hasn’t. CA is a very different place than the one I grew up in.

It's just as much the result of the lack of a meaningful minimum wage and reasonable labor standards. Another perfectly acceptable way to have fixed this would have been for Republicans to accept living wage and labor standards laws, and not have spent the last 40 some years waging war on unions.

I'll say it again. Study after study shows that immigration -- illegal or otherwise -- has very little effect on wages. Mechanization and "pro-business" policy is basically all of it.

But this isn't the first time that anti-immigration hysteria happened. In the 19th century the fear was that massive Irish immigration to America in the wake of the potato famine would destroy the culture and economy of the mostly Protestant, English-descended America. While it certainly changed America, in retrospect it is hard to say it was really for the worse.

Immigrants aren't only laborers. They are also consumers, increasing demand for economic activity.

At least in the US, claiming that immigrants hold "our values" in lower regard than citizens is not at all obvious.

Why wouldn't workers have recourse? Only illegal immigrants are excluded from protection under law. Unless your claim is that no low-skilled laborer are, which undermines your claim about "our values".

> Why wouldn't workers have recourse? Only illegal immigrants are excluded from protection under law. Unless your claim is that no low-skilled laborer are, which undermines your claim about "our values".

Legal immigrants would of course have employment law recourse. The vast majority of illegal immigrants currently do not (but should!), and that is what I was referring to. Those dangerous jobs I mention haven't been automated away yet solely because illegal, unskilled labor exists to perform them (see: dairy farms in Wisconsin that cannot exist without that labor [1]) (or the business cannot exist paying legal wages). Illegal immigration subsidizes business owners through the suffering of those immigrants. Legalizing those immigrants (and therefore, pushing their wages into what legal workers command) would eliminate those jobs. Catch-22.

[1] https://madison.com/ct/news/local/under-trump-wisconsin-dair... (Under Trump, Wisconsin dairies struggle to keep immigrant workers)

I feel like a summary of all of that would basically be "nationals matter, non-nationals don't".

It's not unique to the US at all, I'm in the UK and you know how that's working out.

If the same barrier existed between the north and south of England, if I needed a visa to travel/study/work, I wouldn't be on here commenting, and tons of people would be stuck in crap conditions in the expensive south east because moving north would be visa-gated.

Citizens do matter, if the country has a social system, like the Europeans do.

You can have either social support system, or open borders, but not both. It is unfair to those who built the system to open borders and deplete it on people, who neither built it, nor have intention to continue building it.

Well-argued. I agree 100%.

But note that you can oppose this current system of enforcement being described in the article without being in favor of open borders.

This rests on the assumption that immigrants "deplete systems" and that citizens don't.

They're both just people. If anything, immigrants are generally above-average in terms of dedication (for one, there's a sampling bias because they've just travelled across countries to come to yours).

Limiting access to contributory systems (e.g. having a state pension require contribution) is reasonable, preventing someone from literally setting foot in a country or trading within a country is not that.

The visa-regime borders are not mutually exclusive with migration either. Actually, it ensures, that the country gets the well-driven ones.

If you want to see, how to destroy a country fast, have look at the UN Global Compact for Migration. Social service-wise, it binds the countries to provide more for immigrants (even those entering illegally) than for their own citizens!

> We're at the lowest level of unemployment in decades, and wages are barely moving up.

This has everything to do with corrupt politicians gaming the US economy and tax code for their patrons, and absolutely nothing to do with immigration. Study after study shows immigration has very little effect on wages.

> Some immigrants want to integrate with American society, but not all

What does this even mean? There is no single American society. If you don't believe me, compare Savannah to Oakland, or St. Paul to New Orleans.

Your comment repeats a lot of incorrect and dangerous information about immigrants. I encourage you to do some research.

Imagine if the entire population of Bangladesh were suddenly added to the state of California. You’d quickly become the third world because no country could handle that sort of influx. Just the act of building enough schools would bankrupt the state. Not to mention any other social services — and the only benefit to the country initially would be simply millions of unskilled workers — which would drive wages to near zero. If you enforce minimum wages, then you’d have massive unemployment.

Immigration should be fair, measured and designed around a policy of quick assimilation, both for the benefit of the immigrant and the existing citizens.

That's not realistic. Even remotely. There won't be some sudden influx because getting to the United States alone is hard. For most people, it'll be a transoceanic flight which is not very cheap at all.

Speaking as an immigrant - trust me, there would be. Yes, you wouldn't get the entire population of the Third World overnight. But even the amount that could afford it (or would save to afford it if they knew they had that option) would be orders of magnitude more, and would overwhelm the country.

This should not be down voted. I am from Bangladesh. You’re leaving out the fact that your hypothetical would also destroy our social fabric. Fully 1/3 of the population of the country believes that I should be executed for leaving Islam: http://www.pewforum.org/2013/04/30/the-worlds-muslims-religi.... That makes Bangladesh very moderate compared to say Pakistan where that number is 2/3.

Why dont you ask the native Americans about that.

Are you drawing a comparison between what the US did to Native Americans and what immigrants might do to us? That is such a dangerous, slanderous, ignorant comment that I really have to question your motives.

Is it?

Our ancestors tried to annihilate natives in almost totality (physically first, then just culturally) - why is it a shock that some Americans would be afraid of the same thing happening to us? I mean one of the hallmarks of American culture is subsuming the culture of the newly arrived into our own - it not unconscionable to think that some Americans think all peoples/cultures have that same impulse.

I'm generally pro-immigration, but you need to have immigrants that want to be Americans, not people who want to bring their culture with them and pass it down. That means people who understand freedom of speech, democratic values, and largely either speak, or are willing to learn english.

As an immigrant myself, that is certainly what my family thought they were signing up for when they came here. Indeed, we left Bangladesh precisely because it was turning away from western culture and values.

I think, for the most part, immigrants today feel that way too. (There is evidence that Spanish speaking immigrants are taking up English faster than German speaking immigrants did). What scares me are the (I think well meaning but misguided) liberals who deny that assimilation is imperative.

I guess they assume that assimilation is bad, and is causing some cultural havoc - Whereas you and I both feel that assimilation is an imperative, While the newly arrived have historically wanted to do everything they can to be american, some old fashioned and/or non-americas values will always remain for them - they didnt grow up fully immersed in our culture. In any case assimilation is what will happen, with it mostly locked in by the first native born generation, and fully locked in by the second native born generation.

I'm glad you and your family are here, adding to our rich tapestry of culture and experiences.

Assimilation is not inevitable—see France for example. The native born population giving up on the idea of assimilation (and extolling those who reject it) is terrifying to me for that reason.

I'd consider assimilation to be inevitable in the United States - YMMV elsewhere - The European experience is why I'm particularly not a fan of European style multiculturalism

(I'm clearly very liberal)

I think it's less binary than assimilating vs. not. Cultures are complex, and depending on your preference, you might like American culture (whatever that really even is) if it acquired some traits from others.

For example, Japan has a super low crime rate. Let's stipulate that this is a cultural thing. If you think the cultural traits that lead to this super low crime rate are good, then presumably you'd welcome lots of Japanese immigrants bringing that culture here to the US. On the other hand, if you're a freewheeling quasi-anarchist, you might not favor this kind of thing.

What I've personally always considered America's strength was its ability to ingest other cultures rather than force everyone to conform to some idea of "American" culture. That's how you can get America's rich musical tradition, for example. If we forced everyone to play saxophone instead of the accordion we'd never have Zydeco.

I do think we need to be careful of clearly destructive cultural tendencies. Religious fundamentalism. Nationalism. Homophobia. Misogyny. Racism. But it's obvious that even our own culture has problems with this stuff.

So I sort of worry when we start talking about "assimilation". To me, that feels like forcing people to live and think a certain way, when I think it's more beneficial for us to learn to live and think in a new way together.

> Not a lot of good solutions.

There are a lot of easy improvements; there's no perfect solution, but this is a perfect is the enemy of the good situation.

> Can't let everyone in.

There are two halves of this:

Not everyone is personally acceptable as an immigrant; there are reasons for prohibition based on individual history.

You can't let everyone who isn't individually prohibited in for free because assimilating immigrants has costs.

The US has a basically reasonable approach (perhaps wanting some tweaks in details) for the first, but less than ideal handling of the second; most notably, aside from issues with the design of some of the available visa categories like H-1B, hard per-category caps and even moreso, per-country caps on visa categories exacerbate supply/demand imbalances for which the natural consequence is illegal migration.

> No one cares for merit based immigration like other countries

US preference categories, which are the basis of virtually all legal immigration, are merit-based, though you may not like then particular notion of merit on which they are based.

> and no one wants quotas

We have both per-category, and within each category per-country, quotas, and lots of people want them (and many want them to be smaller.) It's not a good policy, but many people absolutely do.want them.

> because it'll clamp down on immigration from countries with large populations (China and India).

Well, the particular formula effects countries with large number of people qualified and seeking to immigrate, which depending on the Visa category includes Mexico, the Phillipines, China, and India (and I think a couple others in a few categories.) Population has an indirect role, but it's not the direct driver of quota imbalance.

Which generation? This is being planned and executed by the same people that conducted (and failed) the war on drugs.

Why do you think it failed? I imagine failure of the war on drugs would be a revolution. That didn't happen, so the war on drugs didn't fail.

War on drugs was never about drugs.

Downvoted you initially but changed it to an upvote after reading it three times.

Clarification:

Iff the war on drugs was designed to systematically imprison Blacks, then the war's been largely successful.

I agree - it will be interesting to see what happens when other franchisee owned corps catch on - a lot of pizza, hamburger, and other fast food shops are filled with immigrant workers. Then there comes the hotels and casinos, and then things like cleaning companies. All employ large numbers of immigrants that if the govt were to raid could cause issues for. Until the US has a comprehensive immigration plan and a better way to verify legal working status corps will use this law as a way to take back from franchisees.

Sounds like corporate risk management is violent and dehumanizing. Maybe it's time for humane strategies for managing human systems?

While I agree with you, I also feel that 7-Eleven Corporate has taken the wrong approach to this. They've made it "me vs you" rather than "us vs the problem". They're pushing the franchisees in aggressive ways to extract more money out of them to start and then hiring a police force to spy on them. Now it sounds like they're sending out ICE against anyone who criticizes them, even those not breaking the law.

That's not a healthy relationship.

When corporate pushes margins thinner and thinner, only those willing to break laws will be able to survive.

Take the money being spent on surveillance vans and ex-cops and instead spend it on incentive systems, on committees of franchisees, of groups designed around "how can we solve this problem?". Stop using a heavy hand and start working with the other side. They're not the enemy here, they're the lifeblood of the company.

> Now it sounds like they're sending out ICE against anyone who criticizes them, even those not breaking the law.

I guess the article's author were successful in fooling readers. Nowhere in the article does it say that happened ever. Only that rumors about that became widespread (now even more with this article).

The article strongly suggests that is what is happening though. If 7-11 was really worried about it, they'd send them to every 7-11. They don't want to do that because it would make everyone mad, and I bet they don't do it to the franchises they own.

Selective enforcement even of an just law (or contract clause) is itself unjust. That's what the article's about - not that 7-11 is trying to enforce the rules, but that they are selectively enforcing against certain franchisees, and using taxpayer-funded muscle to do it.

Imagine if use of work computers for anything personal was a widely violated rule where you work, but the only people who ever seemed to get busted were the ones who had made complaints to HR, and they brought in the FBI to do it in the most intimidating and humiliating way possible. But hey, they did wrong, so the company's morally right? No.

Are these claims below true? I was under the impression that a in a franchisor - franchisee relationship, the franchisee owns the business, and they are paying the franchisor to use the brand according to whatever standards are agreed upon. But I've never heard of a franchisor being able to "take over" a business, or do payroll for a franchisee. I've only ever heard of a a franchisee having to stop using the franchisor's name and possibly paying some monetary penalties as defined in the franchising agreement, but what's described below sounds crazy.

> Store owners found in violation of immigration law could be in breach of their franchise agreements. And as they well know, 7-Eleven has the contractual right to take back a store from someone who’s violated his or her agreement.

>An accumulation of four breaches in two years can give the company cause to terminate an agreement and take over the store.

>Store owners are required to deposit all sales receipts into a 7-Eleven bank account. The corporate payroll department in Dallas reviews time sheets for each employee, deducts taxes, and sends workers their pay, sometimes on debit cards that don’t require a bank account. Franchisees’ earnings are deposited in their personal bank accounts.

This is totally possible and not out of line with other agreements. I know of one agreement that requires the franchisee to pay corporate's legal fees if a lawsuit resulted from actions in the store.

I've seen that too, but that's also just monetary penalties. From the agreements I've seen for hotels, there was never any equity involved, and the franchisor definitely didn't want anything to do with payroll. In fact, being shielded from that kind of liability is one of the perks of being a franchisor, so it's very surprising that 7-Eleven would even want to be a part of that. I can see wanting to track sales and whatnot so they can verify that they're getting their cut, but I see no benefit to 7-Eleven corporate to getting involved with the staffing, it's not like their royalties would be effected. And they would get to put all the blame on the franchisee when problems like this occur.

Yes this is very common. I know McDonalds and Chick-fil-a both have clauses that if their operators refuse to comply they can shut down and replace them. Usually the building/land the stores are located on are owned by HQ as well so they have options on that end to revoke leases if need be. I wouldn't be surprised if 7-11 has the same setup.

I always assumed franchised businesses weren't owned by the brand that was franchising. Sounds like a terrible deal for the franchisee if all they're doing is renting a license to operate a business and not gaining any equity. I thought the whole point was so that the could work and gain a bit of equity in their business while using the marketing and quality assurance of the brand they franchise.

Depends on the business. CFA handles a lot of the upstart and operating costs such as land, building, equipment, technology, branding, liability, etc for it's operators. As such, they take a large chunk of the profits and maintain strict rules for brand integrity.

Then I'm confused as to what the franchisee is getting out of the situation. It sounds like being a mid level manager, without any benefits that a normal employee would get, that is liable if things go wrong, but almost never shares in upside since royalties can just go up if the business does well.

It seems like most franchisees are not starting a business, they are buying a job.

And the liability for lawsuits from employees, customers, or the government!

That should be the idea, but the brand has requirements. When you go to a McDonalds and order a burger you know what it will taste like. The reason you know that is McDonald's requires all franchises to do quality control. I don't know the exact arrangement, but probably the franchise is not allowed to source their raw materials elsewhere. If a McDonald's burger doesn't taste right they will take action up to taking away your franchise rights - I've never heard of this happening, but they have the right to protect their brand in this way.

When you buy a franchise you get a territory. You know you will not have to compete with anyone else. If the brand thinks it would be good to have a store a few blocks from yours they will either offer you the new store first, or give you a guarantee that your business won't suffer for the competition.

While there is risk, if you buy a franchise and work hard it is a path to a nice life. You won't become richest person in the world, but you should be able to get to upper middle class. The first 30 years are mostly paying the bank though, so be prepared for a long term investment (but after 30 years you can sell your franchise and get the equity back - enough to retire on).

Note that I started with should. Some franchises are better than others. Some will try to sell you a bad territory where it is impossible to live on the earnings. Some will force you to buy (sell) product that your customers don't want. It can be a good deal, but it can also be a ticket to bankruptcy.

>(but after 30 years you can sell your franchise and get the equity back - enough to retire on).

If the franchisee doesn't own the land or building, it doesn't sound like they have any equity. All they have is the licensing agreement with the brand, which I'm sure has an expiration date, but all the power rests with the brand. Unless there's a clause in the franchising agreement that forces the brand to only license to you, the franchisee doesn't seem to be left with anything at the end of the licensing term.

The devil is in the details. There are thousands (more?) of different things you can franchise. Each has different terms! Some are outright scams. Some are great deals. Some are in between where your skill as a business manager is the largest factor.

Owning the land/building is often a negative for a small business - you want to focus on managing your business not maintaining your building (an accountant can explain other reasons why renting is usually better).

This doesn’t sound appealing to me. How much time do most franchise owners spend in the store themselves over the 30 years because they don’t want to pay employees? (That sounded harsh wasn’t meant to).

Say you’re a first generation immigrant, I understand why you would do that for your family but would you ever want that for your kids or would you just send them to college to do almost anything else?

Depends on the franchise and the manager. A gas station has different economics from a restaurant. Generally you need to spend more time doing book work than you expect to be successful, and not having an employee to work while you are in the office makes that part take longer.

When first starting you generally have to work long hours, but after a few years you get better. If you are good at business, you can own 6 franchises and pull in $200k + per year working 40 hours a week. However other franchises do not really allow you do own more than one, it is entirely possible that you are buying a $60/year job working 50 hour weeks (this is a great deal for immigrants). These numbers assume you are good at the business side and the franchise is one of the good ones that wants you to succeed. If either of those fail you take the losses.

They are building equity in the form of earning cash income and then using it to invest in additional cash generating franchisees. It's cash, so they could put that money into owning 7-11 stock, the real estate the store is on or whatever.

I assume the corporation can see any excess profits being made and increase the royalty fees to make sure the franchisee isn't left with much, which it does seem like 7-Eleven is doing according to the article and another poster. It just seems like a very crappy deal, but I guess that's worth taking if you have no other options.

It is sometimes said that McDonalds business model is not in selling burgers but rather being in real estate. They rent out a building and a model for using it, with the goal to rent out more buildings. I don't know how true it is but I have heard that McDonalds as a company don't earn money from any profits from burgers, only from rent. Would be interesting to know how true that is.

It 100% depends on the exact terms of the contracts in question. There's no reason in principle this wouldn't be allowed, and 7-11 would be over-reaching like hell (and get shot down) if they tried it and the contracts didn't allow it, which leads me to believe they do.

Yes. My parents and brother own 7-Eleven stores. 7-Eleven almost always owns or leases the land and builds the store. They also own all the equipment. It is their store that they give you right to run. Every few years franchises are given a new contract that they must either sign or lose their store(s). The new contracts are always worse for the franchisee.

Wow, then it just sounds like an elaborate way for corporate to avoid paying for overtime or being liable for unemployment premiums and other employee liabilities, and having plausible deniability that 7-Eleven employs people without work authorization.

Interesting. So payroll goes through corporate, but for some reason they need to call ICE to make sure no illegal immigrants are being employed at the store? And if they are, it's the store's fault?

What am I missing? Seems like every employee ought to have an I9 on file with corporate.

"The company’s 2017 disclosure documents give the example of a store in Chicago with $1 million in annual sales. After all the fees and costs and taking into account that the company’s share of the take rises as revenue increases, the franchise owner took home $37,000 before taxes. “7-Eleven always sold its franchises as a gold mine,” says Hashim Syed, a former 7-Eleven franchisee and ex-president of the Chicago franchisee-owners association. “I say it’s more like a coal mine.”"

That sounds brutal!

$37k to the owner on $1M in revenue would be a profit margin of 3.7%. This looks higher than the average profit of ~2%. The $1M sales figure doesn't include the cost of what they're selling, their rent, or wages for their workers.

[1] https://retailowner.com/Benchmarks/Food-and-Beverage-Stores/...

It does not until you know the operating margins. Why did not they name company's share of profits explicitly?

That is brutal for all the stress & hours a franchise owner would have to work themselves to make the store profitable. I wonder who handles the money losing promotions financially, the corporate or small business owner?

The title is crafted so salaciously as to make victims of the real criminals: SMB owners deliberately hiring illegal immigrants because they are easily exploitable. Some of the franchisees were literally stealing money from their hires. I don’t see why we should be lamenting people who abuse and prey on others because of their immigration status.

That's not primarily what the article is investigating. The article is pointing out 7-Eleven's alleged use of ICE and Homeland Security to target those franchisees who criticized or filed lawsuits against the corporation.

Yet, there're no proofs in the article, that raids and criticism are related in any way.

> One goal was to build cases to terminate franchise agreements, according to former employees interviewed by Bloomberg and lawsuits filed across the U.S. The tactics could be aggressive. In a 2014 lawsuit, Adnan Khan, a leader of 7-Eleven franchisees in California, alleged that a company investigator followed him for months in an unmarked car and at one point hit and injured him with the vehicle. 7-Eleven settled the suit.

I mean, articles don't have burdens of proof so to speak, but it's not like they did _no_ research.

You could read this article (and its title) several ways. I read it as an exposée on abusive practices throughout the hierarchy, sans lament.

I think there is a deeper issue here with immigration labor. The only one's applying to work at 7-11 or a lot of these minimum wage jobs are people who are not dependable or are immigrants without the proper paper work. So if you hire the non dependable worker you are going to be going through the hiring process every 3 months.

Most people you'd like to hire often say "Why would I come work for you when Uber pays me X?" Uber has made it a lot harder to find dependable workers for convenience stores because most stores aren't willing to raise the wage so high that would eat away into their profit of owning a store in the process. I'm all for fair wage practices but at a certain point you'll be seeing a lot more 7-11's for sale than people willing to buy them. The economics will stop making sense to purchase convenience stores or rather start many small businesses because the wage to pay out will be too high.

Prices will go up and it’ll balance out.

>I'm all for fair wage practices but at a certain point you'll be seeing a lot more 7-11's for sale than people willing to buy them.

If a business wants to sell widgets, and they can't afford to pay for the materials to make the widgets, then it raises prices for the widgets, or it finds that consumers don't find enough value in the widgets to justify the higher price and the business shuts down. Why should it be any different for a convenient store?

The real story here is that the business of large corporations, from 7-11 to Uber, is to outsource all their legal, financial, and safety risk, while keeping the profits. 7-11 regulates every aspect of a franchise business, and takes a large fee, but if the franchise breaks any law, 7-11 takes no responsibility. Imagine if every company ran that way, sending rank-and-file employees to jail, while management and limited-liability owners face no criminal or civil penalties because they "didn't know" their profits came from illegal activity. Or they didn't have to pay worker's comp for employees injured on the job. Or employees had to pay for all their supplies.

For a second I thought frozen water was causing a massive management disturbance at 7-Eleven... #prettyurlproblems "eleven-is-at-war-with-its-own-franchisees-over-ice-raids"

I wish that had been the story :/

It's not that 7-Eleven franchisees are being investigate for hiring illegal immigrants, it's that the corporate office might be using this as a way to intimidate franchise owners it doesn't like.

'Still, franchisees, after years of conflict with the company, went from suspicious to paranoid when word spread that ICE had shown up at stores run by men and women who were in legal disputes with 7-Eleven or were prominent critics of [CEO Joseph ] DePinto.'

I know there are folks on here who will roll their eyes, but this kind of display is emblematic of a fascist government. Fascism is the bonding of state and corporate power, driven by nationalism, authoritarianism, and a (usually) charismatic leader.

For the record, I'm not a radical. I'm not even particularly partisan. I'm an average, middle-class American. But I've read enough history to know which way the wind is blowing in this country. I only hope we can come to our senses before it's truly too late.

> but this kind of display is emblematic of a fascist government

Enforcing immigration law passed by a democratically elected congress is fascist? Really?

No, a corporation using a federal law enforcement agency to target owners who were disfavored by the corporation is typical of fascism.

I'm not even interested in this fake debate that was stirred up about immigration. Of course we have to have enforced borders. Of course we need immigration laws that will be enforced.

What concerns me is the collaboration between corporations and state power, all taking place in an atmosphere of acute nationalism.

Would you see it the same way if it were related to taxes? As in, if 7-11 found out certain franchisee's were skirting tax laws using their brand name and they reported it to the IRS to avoid any collusion claims ahead of time would that be fascist? If not then how is that different?

The point of the article is that a unusually high number of businesses targeted for these actions happened to be critiques of corporate 7-Eleven, or engaged in lawsuits.

And yes, I would worry likewise if it were taxes used as the underlying cause for these kinds of raids.

Again, I'm explicitly not calling this "fascism". I said "emblematic of fascism". I actually don't think we've descended into fascism yet. But as a country, we're getting comfortable with situations that could lead us to a very bad place.

Finally, could someone please vouch for my flagged top-level comment, as it's not breaking any HN guidelines as far as I'm aware?

You could call it “facisism” but that just creates more mudslinging...for example does it help by name calling the franchisees “outlaws” or “criminal enterprises”.

It’s ugly behavior for a franchisor to give tips to the federal government about its franchisees illegally hiring undocumented workers...but that’s what happens when you litigate with unclean hands, the otherside will expose you. The Franchisor would be just as likely to inform local police or DEA if they found out the Franchisees were selling drugs out of their stores. What is the government supposed to do with tips like these? Federal government can’t just ignore tips of criminal/illegal activity because the tipster has a personal bone to pick the alleged businesses hiring undocumented immigrants.

> What is the government supposed to do with tips like these?

The answer's right there in the story. Investigate normally, issue subpoenas with a reasonable time to respond, etc. instead of rushing in with large teams of uniformed personnel to disrupt business and discourage customers. It's only a matter of time before someone gets hurt in one of these, but maybe that's the point. Kristallnacht, anyone?

> You could call it “facisism” but that just creates more mudslinging...for example does it help by name calling the franchisees “outlaws” or “criminal enterprises”.

I'm not really concerned about offending people by using the term "fascism". And it's hardly about the issue alone, or this issue even playing a significant part in my interpretation of where we are with respect to history. It's the entire zeitgeist of the last 10 years that have got me worried, and particularly the past 2 years. If you're at all familiar with interwar European history, then you've probably had at least a few shivers of recognition over the past 2-3 years of that epoch.

I mean, by God I hope I'm wrong, and I hope people will look back at my comments from this time and laugh, "what a paranoid idiot".

But I don't think I'm wrong. We're at a dangerous point in time. Things could go real bad, real fast.

  unusually high number

The article doesn't say that. Given that it offers no data on ICE investigation rates of compliant franchisees, you can't even say there is disproportionate enforcement against the non-compliant.

You're right. I re-read the article and there's really not enough data to make a firm conclusion, although it seems like a real possibility.

I wish people on this site would just argue using facts like you do, instead of downvoting comments to invisibility and flagging them. It's frustrating.

No, it isn't:

People here want to perform a bait-and-switch: "Corporatism" was a word the Fascists used, but people want it to mean "business involvement in government", so the use it in the new sense while stating it's the word the Fascists used. It's dishonest.

Yes, selectively enforcing laws to benefit one side in a business relationship is fascist.

Pretty sure ICE will enforce the law against anyone reported to them.

Yes, I'm pretty sure they would, but if they've gone out of their way to prioritize 7-11 corporate's requests, or prosecute them more aggressively than they would in general, then they're colluding in discrimination. And none of that absolves 7-11 corporate for calling them in selectively.

> Fascism is the bonding of state and corporate power

... only if you define "corporation" the way Fascists did:

http://www.sjsu.edu/faculty/watkins/corporatism.htm

> In the last half of the 19th century people of the working class in Europe were beginning to show interest in the ideas of socialism and syndicalism. Some members of the intelligentsia, particularly the Catholic intelligentsia, decided to formulate an alternative to socialism which would emphasize social justice without the radical solution of the abolition of private property. The result was called Corporatism. The name had nothing to do with the notion of a business corporation except that both words are derived from the Latin word for body, corpus.

> The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups (sometimes called corporations) and representatives of those interest groups settle any problems through negotiation and joint agreement. In contrast to a market economy which operates through competition a corporate economic works through collective bargaining.

It's fascinating that "fascism" today means nothing like what it did originally, even though the definition hasn't changed -- the definition of the words in the definition changed!

"Fascism" is a bad word simply because Mussolini came to power when Fascism was popular in Italy, and Nazism became "Fascist" because Hitler allied with Mussolini.

No, "fascism" is not unpopular simply because of that association. It's unpopular because its core principles as stated by its own proponents - authoritarianism, nationalism, violence as a tool of policy (which the "fasces" visually represents) - were already in disrepute at its founding. It was meant to be a bad word to those who believe in democracy, globalism, and non-violence.

> It's fascinating that "fascism" today means nothing like what it did originally, even though the definition hasn't changed -- the definition of the words in the definition changed!

That's entirely incorrect:

While what you describe happened in Italy, at least in the Mussolini's early years in power, that is decidedly not what happened in fascist Germany, where business powers closely cooperated/collaborated with state powers. We can call it those business powers "industrialism" if the word "corporate" is bothering you.

I'm calling you out on the bait-and-switch you're attempting.

The fact this was down voted proves the historical illiteracy of HN.

Stop lying.

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