7-eleven was caught underpaying workers Credit:Glenn Hunt Once the scandal hit (and the new deal had to be introduced, including a profit-sharing scheme and a profit guarantee of $340,000 a year for franchisees), that strategy backfired spectacularly as some of these sites became a financial drain on head office. The upshot is stores that were previously marginally profitable, are now being propped up by head office. Some franchisees, such as Ren, battled away for years running low-income generating stores on the basis that, when the time came to sell, they would make some money on goodwill. The decision by head office to pull the pin on Ren has put paid to this. Terminating a contract obliterates the goodwill. It has prompted some franchisees to consider joining a class action. A speculated 50 franchise agreements will be approached to have their franchise agreements terminated before their contracts expire. At least one franchisee with a contract that has more than a year to go has been asked to sign a termination agreement in return for compensation.

Former Victorian health commissioner Beth Wilson. Credit:Samantha Robin In the case of Ren, a single mother with a heart condition, she was told earlier this year her contract would not be renewed and she would receive $10,000 in compensation if she handed back the keys on August 30. But the handover went awry when at least 10 people appeared from head office at 6am, including construction workers who started erecting a thick wire fence around the store. 7-Eleven franchisee Helen Ren outside her South Yarra store. Ren, who uses English as a second language, says she was presented with a legal document that she was told to sign. If she didn't, she wouldn't get her compensation. She didn't have a lawyer present.

It then becomes a case of he said, she said. Illustration: Cathy Wilcox. According to a 7-Eleven spokesman, Ren and 7-Eleven mutually agreed to a store handover. When the day came, she changed her mind, he said. "Having withdrawn her support for an early handover, Ms Ren is continuing to operate the store until the franchise agreement ends. The erection of the fence was to facilitate the immediate work to enable environmental remediation of the site. This was specifically in regard to rendering the site safe for works." "7-Eleven works with franchisees to try to ensure a store handover is as smooth and as effective as possible, while recognising it can sometimes be emotional for a franchisee," he said. Former Victorian health commissioner Beth Wilson saw the emotional toll first hand. Ren called Wilson for some help. "She told me she was being bullied to sign a termination contract," Wilson says.

Wilson described the situation as intimidating. "I'm horrified to think that someone could be treated so appallingly." On video, Wilson captured Ren peering through the freshly erected fence. "It looked like she was in a prison," she says. "I decided to video what was going on. When I started to interview Helen, men from inside the shop started to make phone calls. A manager came over to try to get her to sign the contract. Then, after a few more calls. they told her they would be leaving after putting the stock back on the shelf." Ren will continue to operate the store until the contract expires in November. When she leaves, she will have an outstanding debt on a store that she paid $345,000 for back in 2006. There will be no compensation and no goodwill. Since the wage scandal broke a year ago, 7-Eleven has tried to address some issues. It has overhauled its business model, redistributing its profit-share model, it has almost tripled its threshold on its hardship program to $340,000 and it has set up a compensation scheme, which has so far paid out $26 million to affected workers. There have also been changes at board and senior executive levels. It is a good start but, behind the spin, problems continue to fester away.

The wage rip-offs continue and some franchisees, who were sold stores that were arguably never financially viable, are ready to take up legal arms. Any legal action will look at whether these stores were ever profitable and, if not, why the 7-Eleven board signed off on them. Michael Fraser, a consumer advocate who discovered wage fraud at 7-Eleven when he became friendly with some employees a few years ago, says in the past few weeks he has had a number of calls from workers who feel intimidated. "7-Eleven's intimidation attempts have increased against workers who have made claims," he says. "Franchisees in underperforming stores are also being intimidated, yet offending multi-store owners continue to underpay workers." Fraser says a worker called him a few days ago after being attacked in the street by men sent on behalf of a multi-store owner to warn him against speaking out about 7-Eleven. "I gave head office compelling evidence about this franchisee last year, yet he continues to operate without restraint. Management is yet to come to my office as promised last year to view and collect a significant amount of evidence." 7-Eleven says it can't "outsource morality", but when that morality appears to be sadly lacking, it may need to have a rethink.