Some 4 7-Elevens Accused of Price-Gouging Won’t Lose Franchises : Consumers: Southland says lack of evidence prompted the decision. Four other franchisees remain targeted.

The parent of 7-Eleven Stores disclosed Monday that it is not terminating franchise agreements with four of eight store operators it had accused of price gouging after the Northridge earthquake.

In January, Southland Corp. announced plans to cancel agreements with eight franchisees to send a signal that 7-Eleven “does not tolerate or condone” price gouging. The company’s action came amid widespread complaints about gouging and was praised by lawmakers.

However, Southland spokeswoman Margaret Chabris said Monday that the company has reached settlements with four of the franchisees, saying there was not enough evidence against some of them “to win in a court of law.” The company is continuing its efforts to terminate agreements against the remaining four franchisees, she said.

The company said it gave five franchisees the opportunity to settle the violations, in part by paying 7-Eleven about $15,000 each. Four accepted the offer.

The fifth, Ming Ming Lu, did not accept the settlement and is facing termination, along with Meilin Hua, Simaan G. Mourad and a fourth franchisee whose name has not been disclosed.

Southland has filed a suit against Lu, Hua and Mourad to force them to turn over their franchises. The three are fighting the suit in court, saying they did not gouge customers.

In the days after the Northridge quake, complaints were rampant about price gouging at liquor stores, convenience stores and gas stations. Concerns about gouging led to swift passage of a county ordinance, modeled after a Los Angeles city ordinance, prohibiting price increases of more than 10% in times of emergency.

In the three months since the quake, however, Los Angeles city investigators have been unable to substantiate most of the accusations. No price-gouging charges have been filed against any store owner, and Deputy City Atty. Greg Parham said only a fraction of the 1,600 complaints remain under investigation.

Parham said Monday that Lu, Hua and Mourad have been cleared of price-gouging charges for “insufficient evidence.”

In investigating complaints against 7-Eleven Stores, the city also considered evidence supplied by Southland. The company installed a toll-free hot line for complaints and dispatched a team of undercover shoppers.

Parham said Southland’s evidence mostly consisted of “violations of Southland’s procedures, like not giving customers receipts.”

Hua said in an interview that she rounded off prices at her store because she did not have change. For example, she said she charged $5 for a four-pack of Evian water that usually sells for $4.36.

Hua said she did not want to open her Reseda store on Jan. 17--she had no electricity and it was cluttered with broken glass and damaged merchandise--but customers pleaded for water and other supplies. She said that since then, 300 customers have signed a statement saying they thought she treated them fairly.

“I tried to make the transaction easier, faster,” Hua said. “This money cannot make me rich, it cannot make me happy. . . . Opening the store was a big mistake.”