Time to look closely at franchises and their supply chains
In sustainability it is often said that ‘we don’t live on an island and what we do in one place impacts on others’. And this has always been the case for environmental issues such as pollution, waste and greenhouse gas emissions.
But last Monday night’s Four Corners program also highlighted human rights issues in Australia. Who’d have thought it?
Four Corners reported that many 7-Eleven franchisees were allegedly breaching workers rights and underpaying employees. This breaches one of the core foundations of sustainability; a core that many thought was done and dusted in Australia due to our Fair Work Act. Not so apparently.
7-Eleven is a highly visible franchise model. If the company structure is so flawed that franchisees need to cut wages to make money, how will customers react to that information? How long can the 7-Eleven last, if customers react to these lack of ethics?
Let’s think about it. More than half of their current customers probably won’t even connect the stories in the press to their local store and will continue to use. Fifteen to twenty per cent will stop using 7-Eleven immediately and may confront the store for ‘an explanation of whether this activity is reflected in my local store’. The other thirtyish per cent will probably reduce their interaction and ‘claim’ to have stopped using 7-Eleven.
If this story continues and we start to meet the ‘real people’ affected by these stories, then those twenty per cent of ‘stopped users’ become agitators influencing people to make and stand and to stop using the stores. The percentage of non-users will grow and before long, 7-Eleven could become a company from history.
From a revenue sense, the bottom-line on each and every 7-Eleven store is negatively impacted today and if the margins are to be believed, then most franchisees will be in trouble.
This brings me back to Alan Fels comment on 4 Corners that the 7-Eleven model is a flawed franchise model. If 7-Eleven has so little concern for its workers, what other negative environmental impacts do these stores hide? Perhaps it’s time to have increased supply chain and procurement transparency for franchises.
And what worries me even further is how many other convenience stores have modelled their franchise-structure on the 7-Eleven model? Perhaps franchise head offices should produce sustainability reports that drive a culture of transparency and sustainability rather than a culture of making a buck at the expense of everyone else.
Read more about the 7-Eleven scandal in our news article here.