7-Eleven is offering higher profit to its franchisees following the workers’ exploitation report that led to the resignation of two company heads. However, franchisees are not appeased with the proposal as they reportedly feel more “hurt and gutted.”

To amend the workers’ exploitation scandal that surfaced last month, 7-Eleven is revamping its business model. After the first three meetings, however, franchisees are not convinced with the proposal. The new model, which is going to be enforced in the next few months, is reportedly a way to “incentivise” ethical conduct.

The new franchise agreement allows the head office to terminate a franchisee over “payroll issues.” Aside from that, franchisees are offered a higher profit through a 50-50 division between the franchiser and the franchisee in the 138 stores that deliver an income of AU$300,000. This is a 7 percent increase from the original 43-57 division that was applied to all franchisees regardless of income and profit.

In addition, over 360 stores that produce a gross income of AU$300,000 to AU$500,000 a year is offered 48 percent of the gross profit while the head office gets 52 percent. The gross profit share for the remaining over 100 stores will be lowered by 1 percent for every additional AU$100,000 earned.

New chairman Michael Smith said to reporters on Thursday that the new model recognises the changing retail landscape and regarded the measure as a remedy to the challenges currently facing the company.

7-Eleven franchisees, however, are not happy. One noted that the 7 percent increase on profit will force him to pay AU$50,000 more every year. Another said that she had served the business for more than a decade but was treated like a slave. Anonymous franchisees also talked to Sydney Morning Herald, or SMH, and majority of them said that they are not happy with the proposal. A huge number of franchisees are now reportedly willing to sell, which will not be good for 7-Eleven.

Meanwhile, a class action against the head office is being prepared, and Stewart Levitt will head the lawsuit. He warned franchisees to be very careful about giving away their litigation rights, SMH reports.

Last month, Fairfox Media uncovered that 7-Eleven is exploiting its workers by letting them work longer hours while paying them below the minimum wage. This issue had led to two of its head executives, CEO Rusell Withers and Chairman Warren Wilmot, to resign. Withers, who founded 7-Eleven in the country, is still the company’s chairman.

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