Due to reduced customer demand, 7-Eleven and its franchisees have been granted conditional interim authorisation to discuss potential temporary store closures, or reduced trading hours.
7-Eleven owns and operates stores in competition with its franchisees in some areas and therefore discussions and agreements between them risk breaching the competition laws.
“We recognise that 7-Eleven and its franchisees are facing difficult trading conditions due to the COVID-19 pandemic and believe this co-operation could help the network, and individual stores to remain viable,” says ACCC Chair, Rod Sims.
“Importantly, franchisees are not required to temporarily close or reduce their store hours if they do not wish to. Our decision to grant interim authorisation does not force franchisees to agree to the terms offered by 7-Eleven.”
Those franchisees that agree to close temporarily will receive an ex-gratia payment from 7-Eleven to cover certain unavoidable operational costs. For franchisees that agree to reduce their hours, the minimum guaranteed income that the franchisee receives from 7-Eleven would be pro-rata adjusted to reflect the temporary reduction in trading hours.
“Franchisees are strongly encouraged to seek independent legal and financial advice when considering whether to adopt these temporary measures,” advises Mr Sims.
“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked.”
Details on how to make a submission and more information, including the ACCC’s interim authorisation decision, is available at 7-Eleven Stores Pty Limited.