7-Eleven welcomes parliamentary inquiry into franchising

23 March 2018

7-Eleven welcomes the Parliamentary inquiry into the Franchising Code of Conduct and Oil Code of Conduct initiated by Senator John Williams and passed by the Senate on Thursday.

“We look forward to sharing our experience with the Joint Parliamentary Committee and the lessons we have learned along the way,” said 7-Eleven’s Chief Executive Officer, Angus McKay.

7-Eleven believes the inquiry’s terms of reference proposed by Senator Williams are wide enough to encourage a balanced debate, including the focus on termination provisions, and harmonisation, of the Franchising Code of Conduct and the Oil Code of Conduct.

Under the existing industry codes, wage underpayment does not automatically entitle a franchisor to terminate a franchise agreement. Termination for underpayment is only available to a franchisor if it can be demonstrated at the requisite level of

proof that the underpayment has occurred in a way that involves fraudulent conduct.

7-Eleven’s experience demonstrates that the barriers to terminating a franchise agreement in cases of underpayment are difficult enough for a company the size of 7-Eleven to pursue through the courts, let alone the two-thirds of Australian franchisors that are small-medium businesses.

Accordingly 7-Eleven continues to call for the two relevant industry codes to be amended to give franchisors the right to terminate a franchise agreement in the case of serious non-compliance with Commonwealth Workplace Laws or Fair Work Instruments, such as deliberate wage underpayment.

“7-Eleven is one of Australia’s most successful franchisors, and after celebrating 40 years of strong growth in Australia we remain committed to a thriving franchise model,” said Mr McKay.

“We share the concerns at recent developments within the broader franchising sector, and look forward to contributing to the work of the Joint Parliamentary Committee in developing recommendations to raise the standard across the sector and ensure a transparent, balanced and hopefully prosperous partnership between franchisor and franchisee.”