7-eleven is now offering new franchising model as part of revival attempts following the investigation into alleged widespread employee underpayments.
Australian Food News reported that the new model was communicated to franchise owners in a Sydney meeting last week. Too, it will reportedly see head office and franchisees split profits based off how much money stores are making.
New 7-Eleven chairman Michael Smith said that the model will help in fixing the problems faced by the chain as it reflects a changing retail environment. Moreover, it is believed franchises are being made to follow new conditions and terms under the new arrangement.
The Fair Work Ombudsman informed the former owner-operators of a 7-eleven store in Melbourne that they will have to face court for allegedly underpaying 12 employees. It was previously reported that the employees which included international students were paid as little as AUD$11 per hour and one employee is owed more than AUF$16,500 in unpaid wages.
Fair Work investigated the store in question in late 2014. The Fair Work Ombudsman said it has retrieved more than $600,000 of unpaid wages and entitlements for 182 at 7-Eleven stores across the last six years.
At the moment, the Fair Work Ombudsman has continually been investigating the allegations of systematic underpayments and false record-keeping.
To recall, 7-Eleven announced in late September that it's Chief Executive Officer Warren Wilmot and chairman Russ Withers has stepped down from their positions. The two were replaced with Bob Baily as the interim CEO until someone else was permanently appointed to the position and Michael Smith was appointed as the new Chairman.
"Over the longer term Michael will need to forge a very close working relationship with our new CEO so it makes sense for that process to commence from the outset," Russ said at the time of his resignation. "Michael will lead the appointment of Warren's replacement and take an active lead role in navigating 7- Eleven through the current issues we are facing relating to the underpayment of staff. We're very fortunate to have someone with Michael's credentials and track record on the board and able to step into this role. Michael's detailed knowledge of the 7-Eleven business together with his breadth of experience across a range of boards is exactly what we need at present," he added. "Naturally this is a major decision for me to stand aside as Chairman, however I will continue to be a shareholder and I am determined to make sure the Company is in the right hands to move forward."
Russ will remain Chairman of the group holding company which has Starbucks and 7-Eleven along with real estate and shares within its investment portfolio.