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Log In / Register | Jun 25, 2018

7-Eleven Blasted: Slavery Under Investigation

"They can't run 7-Eleven as profitably and successfully as they have without letting this happen. The reality is it's built on something not much different from slavery." And then an hour long nationally broadcast exposé, withouit ads, went into great detail that will shake Australian franchiisng with implications for the US franchisor.

 “We will clearly show this practice cannot be explained away simply as the fault of a few rogue franchisees. It's done with the complicit knowledge of head office.At the top of the chain: a brother and sister who have amassed a fortune. In contrast, we have many examples of workers at 7-Eleven outlets being seriously underpaid or not paid at all, as well as falsified records and simple blackmail.”  4 Corners

The highly respected and popular 4 Corners program went much further than exposing 7-Eleven franchisees under-paying workers, it went to the gouging by the franchisor of franchisees that has virtually created a system where desperate franchisees are expected to abuse workers or fail.

“An insider revealed 7-Eleven had been reeling amid a media investigation that found a massive cover-up by head office and contracts that saw many of the company's 620 stores struggle to break even if they had to pay proper wages.” Sydney Morning Herald

While much of the focus is now on the Australian master franchisor, the ABC did not miss similar outcomes under the direct jurisdiction of the US master franchisor.

“He pled guilty to conspiracy to commit wire fraud and conspiracy to harbour undocumented aliens for financial gain which, ah, he received a seven-year sentence. Additionally, ah, he was ordered to pay US$2.6 million in restitution to 30 employees.” 4Corners

“Former consumer watchdog Allan Fels has slammed the 7-Eleven franchise model and says the only way franchisees can make a living is by ripping off their workers.” ABC

Former chairman of Australian Competition and Consumer Commission [ACCC] Allan Fels, will head up an investigation into widespread exploitation of thousands of workers across the 7-Eleven's giant franchise network.

"There is no doubt that Allan Fels, whose position on this issue is well known, will fulfil this role without fear or favour. He is staunchly independent, and with the support of Deloitte's forensic accountants, I am confident that his involvement to help ensure 7-Eleven pays all approved claims promptly." Sydney Morning Herald

Professor Allan Fels is a man whose reputation suggests he will not hesitate to produce a full, accurate and detailed report.  Already some of the fallout is reaching out to other brands. As yet, none of the media reporting on 7-Eleven have mentioned that other franchise brands use the prospect of citizenship to lure unwitting franchisees. 7-Eleven splashback can be expected to encourage more franchisees from more franchise brands operating in Australia.  

About the only aspect of these new revelations not mentioned by the media is the influence legislators have had in creating a franchising environment where abuse flourishes.

This is a big story in Australia, not just a big franchising story, a big scam story being played out in all forms of media every day.

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About Ray J Borradale

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Area of Interest
Franchise Operations