7-Eleven can collaborate with franchisees, says ACCC

The Australian Competition and Consumer Commission has granted convenience chain 7-Eleven the ability to discuss temporary store closures or reduced trading hours with its franchisees.

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.

The ombudsman has given conditional interim authorisation to discuss potential hours in light of reduced customer demand because of COVID-19 restrictions.

ACCC Chair Rod Sims said “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.

“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.”

Franchisees who agree to temporarily shut their doors will receive an ex-gratia payment from 7-Eleven to cover certain unavoidable operational costs. In cases of franchisees reducing their hours, the minimum guaranteed income the franchisee receives from 7-Eleven would be pro-rata adjusted to reflect the short-term reduction in trading hours.

Sims advised franchisees to seek independent legal and financial advice as they consider whether or not to adopt these temporary measures.

Interim authorisation is subject to a condition that requires 7-Eleven to notify the ACCC of arrangements reached with franchisees to provide some ACCC oversight.

“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked,” Sims said.

The ACCC will seek feedback on 7-Eleven’s application for authorisation.