Franchisee accused of siphoning money and having employees wrongly enter product costs.
7-Eleven filed a lawsuit Friday against the franchisee of five Long Island, N.Y. stores, claiming he siphoned hundreds of thousands of dollars for at least four years, the Wall Street Journal reported.
The company is seeking $1 million in damages, and also terminated its franchise agreement with Tariq Khan—who reportedly has not vacated the stores—alleging that he has operated a “business within a business” at each of the five stores, diverting cash to buy merchandise from suppliers and never reporting the invoices to 7-Eleven.
Khan’s employees allegedly would bypass the register for certain purchases or misidentify the product, for example, Skoal Wintergreen chewing tobacco, which retails at $7.09, was recorded as a hot beverage refill for $1.36.
7-Eleven reported that it first noticed possible wrongdoing at one of the five stores during a routine review in 2010. The company then launched an undercover operation, making 246 secret buys, the Wall Street Journal reported.
Khan was not one of the nine 7-Eleven store owners and managers charged with exploiting immigrants from Pakistan and the Philippines that came to light after a recent federal probe that also took place in Long Island.
