The 7-Eleven convenience chain has responded to dissatisfaction among former franchisees about end of term arrangements.
Most recently, a group of former 7-Eleven franchisees have demonstrated outside the retailer’s Melbourne headquarters, protesting their store takeovers. According to Convenience & Impulse Retailing, the ex-franchisees called on the convenience chain to compensate them for the goodwill they had built in their businesses.
Franchise Executives contacted 7-Eleven Australia for comment, and the retailer provided a statement that “acknowledges and recognises that exiting any business can be a difficult and challenging experience”.
The statement outlines that a franchisee’s path to profit is through revenue generated while operating the store, and points out the franchisor’s 95 per cent success rate for franchise renewals or transfers.
“We recognise that some franchisees may have had different expectations about what happens when they exit the business. However, the 7-Eleven franchise model is clearly outlined in all agreements, and prospective franchisees are encouraged to seek their own legal and financial advice prior to entering their agreement,” the statement reads.
“Franchisees are compensated through the profits they generate while operating their store over the licence period. While we cover substantial costs, including leasing costs, store fit outs, equipment, systems and training, the potential upside for operators comes from managing a store.
“7-Eleven aims to work with franchisees 12 to 18 months before the agreement expires to support them during this period and ensure the business is meeting operating and performance targets.
“When an operator seeks to transfer their licence to another franchisee, we support that process, however, any negotiated payment is between the outgoing and incoming franchisee, not 7-Eleven Australia.
“We recognise that, in some cases, franchisee expectations about renewal or transfer may not always be met. We understand this can be disappointing and difficult, particularly where franchisees have invested significant time, effort and personal commitment into their store.
“Over the last 10 years, where 7-Eleven Australia has had ongoing leases in place, 95 per cent of franchise agreements have been successfully renewed or transferred,” the statement reads.
The franchisor’s takeover policy hit the headlines late June with A Current Affair segments filming store takeovers.
