7-Eleven founder addresses business model changes, urges underpaid workers come forward
7-Eleven founder Russ Withers has flagged major changes to the company’s business model in the wake of allegations the company systematically underpaid some of its workers.
Mr Withers, who chairs the company, released a statement today and said he took responsibility for the allegations against the company and had directed the board and company executives to fix the problem.
“Our franchise business model is based on trust and mutual benefit,” he said.
“I am deeply disappointed and dismayed that some people with whom we are in business have abused that trust.”
The millionaire businessman said the company was urgently addressing two issues.
The first was the underpayment of workers.
Mr Withers said it was well known the company had established an independent panel led by Professor Allan Fells.
He urged anyone who had been underpaid to get touch with the panel.
“The panel’s terms of reference are designed to protect confidentiality, to assess claims of underpayment and — where determined — make good on that underpayment,” Mr Withers said.
The second issue was the convenience store chain’s business model.
Mr Withers said he had met with franchisee owners from three states this week “to contemplate substantial changes to better reflect our mutual obligations, ensure compliance and incentivise the positive behaviours required under our franchise agreement”.
They had asked for the establishment of an Enterprise Bargaining Agreement.
Mr Withers also flagged a full review of the company’s profit share model.
It was widely panned for taking 57 per cent of franchisees’ profits.
“Changes will be offered in return for the requirement for all franchisees to utilise the 7-Eleven corporate payroll system, and the introduction of external audit of compliance to meet all obligations under law and the franchise agreement,” Mr Withers said.
“I give a personal commitment that this will happen in weeks not months, providing greater safeguards for franchisees’ staff and for franchisees’ businesses.
“What has happened happened on our watch, and it is my commitment as founder and chairman that it will be made good.”
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