News National 7-Eleven boss flags changes to business model

7-Eleven boss flags changes to business model

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The embattled founder of 7-Eleven has flagged radical changes to the company’s business model as the fallout from allegations of systematic underpayment of its workers continues.

Russ Withers, who chairs the company, said in a statement that he took responsibility for the allegations against the company and had told the board to make changes to its operation.

“Our franchise business model is based on trust and mutual benefit,” he said on Thursday.

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“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 – underpayment of workers and the convenience store’s business model.

He urged anyone who had been underpaid to get in touch with an independent panel charged with hearing claims of complaint against 7-Eleven.

“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.

Mr Withers said he had spoken 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, 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.”

On Wednesday, Mr Withers resigned from a prestigious position on the the Australian Olympic Committee, where he was in charge of the body’s governance and accounting structures.

– with ABC

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