The embattled convenience chain is allegedly cutting franchise agreements on the basis of “performance”, stripping franchisees of their goodwill.

According to a Fairfax Media report, there have been claims that franchisees running low-income generating stores are having their agreements cut by the franchisor, which would remove the opportunity for franchisees to benefit from goodwill after selling.

The report speculates that 50 franchisees will be approached to have their franchise agreements terminated before their contracts expire. It also alleges that bullying tactics have also been used by the franchisor which has resulted in some franchisees to consider joining a class action.

However, a spokesperson from 7-Eleven has responded, stating that the franchisees and their staff are supported and encouraged, that store turnover is dependent on a range of factors.

“Intimidation of any kind is unacceptable and if individuals have concerns about behaviours they are encountering we would urge them to utilise our whistleblower service,” he said.

“Like all retailers, 7-Eleven actively reviews store locations. In any given year, some stores are opened and others closed in view of performance, sustainability and market opportunity.”

However, the report also alleges that the convenience chain’s franchise model was not profitable to begin with.

“7-Eleven’s model is among the most competitive and attractive in the franchise industry,” continued a spokesperson from 7-Eleven.

“Franchisees’ profit share and minimum profit guarantees under our franchise agreement have been increased ensuring our network is positioned for growth, and removes any suggestion that store owners cannot afford to comply with the law – including paying staff the right wages.”

7-Eleven has also stated that support mechanisms are available in the system, including a minimum income guarantee coupled with advice from retail specialists on store operation, presentation and customer interaction. Product innovation and marketing support as well as a raft of training and education modules that are also rolled out across the network.

The convenience chain has been in the media spotlight over systematic wage rorts across the network, the appointment of a new CEO, and an internal wage repayment program.