The franchise sector is in the spotlight as tales of corporate takeovers of franchised stores came to light on mainstream media last week.

7-Eleven took over a franchised store in Sutherland, Sydney, after the franchisee came to the end of the fixed 10-year term and had failed to find a buyer approved by the convenience store chain.

The 6am takeover was filmed by Channel Nine’s A Current Affair, with questions asked about the loss of the business without compensation.

Other media channels followed the story and there were also claims of 7-Eleven taking back the Kensington, Sydney store, in similar circumstances.

While reportedly following the franchise agreement the franchisees signed, the actions of 7-Eleven have provoked a swathe of negative social media responses, including calls to boycott the convenience chain.

7-Eleven responds to questions

Inside Retail‘s sister title Franchise Executives asked 7-Eleven for comment and clarification on the store takeovers.

In a written response, a 7-Eleven spokesperson said the chain’s “clear strategic ambition” relies on a “healthy store network and great store operators”.

“For us, this means having both franchisees and corporate store leaders operating our stores. This has not changed under new ownership. We have and continue to value this model.

“Our model provides franchisees with an opportunity to operate a 7-Eleven store for up to 10 years.

“We are governed by the relevant franchise agreement and applicable regulatory frameworks. We have many responsibilities under these Codes, and we take these seriously.

“We have and will continue to work with each franchisee on any questions or concerns they may have regarding their agreement and individual circumstances. 

“Given each individual circumstance differs, we will not be providing comment on the cases that are being publicly discussed.”

7-Eleven is bound by the rules of Franchising Code of Conduct, and the Oil Code of Conduct, both enforced by the Australian Competition and Consumer Commission.

A spokesperson for the ACCC told Franchise Executives, “The ACCC does not generally comment on individual businesses or investigations we may undertake.”

The advice for businesses is to report their concerns about compliance to the ACCC.

• This story was originally published on Franchise Executives.