7-Eleven cancels agreements with two franchises after uncovering alleged underpayments

7-Eleven has terminated agreements with two franchises after an internal investigation found the stores in question had failed to meet their workplace obligations.

In a statement issued to SmartCompany, 7-Eleven interim chief executive Bob Baily said the decision to terminate the agreements followed an “extensive investigation”.

The 24-hour convenience chain said it did not make the decision lightly.

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“Effective today, 7-Eleven has taken operational control of the stores concerned and existing staff will be offered on-going employment,” Baily said.

“There are no winners in circumstances where people are underpaid. Everybody is impacted, including those franchisees who are meeting their obligations and doing the right thing.”

“7-Eleven does not condone the underpayment of franchisee employees and is doing everything it can, including working with franchisees, to stamp out the practice.”

In a memo to franchisees sent out this morning, and seen by SmartCompany, Baily said mistakes can and will occur from time to time and they should be addressed with coaching as well as fair and reasonable warnings.

However, the interim chief executive also explained that 7-Eleven will terminate franchise agreements “where the circumstances dictate it”.

Last week the Fair Work Ombudsman commenced legal action against a 7-Eleven franchisee for allegedly underpaying staff thousands of dollars.

The franchisee, who operates two stores in Brisbane’s CBD, is alleged to have short-changed staff more than $31,000 between September 2013 and September 2014.

The franchisee will face court later next month.