7-Eleven Franchisees: Store Operators May Need To Pay Back PPP Loans

The National Coalition of Associations of 7-Eleven Franchisees (NCASEF) said store operators who took in federal Paycheck Protection Program (PPP) loans could potentially have to pay back a “material portion” of the funds. The NCASEF is a trade association for 7-Eleven franchise operators in the U.S., initially founded in 1973, according to a press release.

The group says the 7-Eleven Inc. (SEI) franchise agreement includes “the 7-Eleven Charge” that signifies payments franchisees make for supplies, rent, and other business costs. However, franchisees can’t input lease payment accounts into the loan forgiveness application as the group claims that SEI ignored “repeated requests” to reveal the actual portion for rent.

Jay Singh, chairman of the National Coalition of Associations of 7-Eleven Franchisees, said in the press release, “This is another example of how SEI exerts pervasive control over its store operators. Because of the opaque terms in our franchise agreement, 7-Eleven franchisees face the frightening proposition of having to repay PPP loans while other small business owners will be able to have those loans forgiven.”

The group said PPP loans were meant to handle eight weeks of expenses for companies with under 500 staffers. It said loans can be fully forgiven if a minimum of 75 percent of the funds are used for payroll and the rest for utilities, rent and other non-payroll expenses.

Singh said that SEI instructed franchisees to estimate their rent based on the market but “franchisees need the actual value and receipts in order to request loan forgiveness.”

In separate news, a measure that would make it easier for small companies to receive a forgivable federal loan easily passed the House per a report in late May. The bipartisan bill answers a request from entrepreneurs who sought to have legislators reduce the amount of PPP loan that must be used on payroll from 75 percent to 60 percent.