7-Eleven, a prominent convenience store chain, is facing allegations of taking advantage of widespread fuel theft from service stations. It has been claimed that the company charges its franchisees their regular profit margin for stolen fuel that hasn’t been sold.
Franchisees operating 7-Eleven service stations, who already suffer financial losses due to “drive-offs” (when customers leave without paying), argue that they are additionally burdened with paying the company for the lost profit on stolen fuel.
According to the fine print in the 7-Eleven franchise agreement, stolen fuel is treated as a purchase made by the franchisee from 7-Eleven Australia.
A concerned 7-Eleven franchise owner, who preferred to remain anonymous, shared that he experiences an average loss of $150 per day from drive-offs at his suburban service station, with some days seeing as many as five incidents. He expressed frustration, stating that while they endure the hardships caused by these thefts, large corporations like 7-Eleven take advantage of their misery, which he finds unethical and unjustifiable.
In Australia, 7-Eleven operates around 750 stores, with over 600 of them being integrated fuel and convenience outlets, predominantly run as franchises. The company claims to be the largest independent fuel retailer on the eastern seaboard, selling Mobil-branded fuel.
Lawyer Stewart Levitt from Levitt Robinson has criticized 7-Eleven, comparing its profiting from fuel theft to the actions of pimps. He emphasized that franchisees face a double injustice of being robbed and then having to compensate Seven Eleven Australia for the lost profit, plus the Goods and Services Tax (GST), on the stolen goods.
Mr. Levitt previously represented franchisees in a successful class action where they were awarded $98 million after accusing the 7-Eleven group of misleading them about the profitability of their stores. The class action revealed that franchisees could only make a profit by underpaying staff and working for less than the minimum wage.
Additionally, 7-Eleven had to pay millions more to workers due to allegations of systematic wage theft.
Despite repeated requests from service station franchise owners, 7-Eleven has not installed up-to-date cameras or a Scan Cam system that would capture license plates, alert attendants about known offenders, and facilitate reporting to the police.
Franchise owners have resorted to implementing pre-payment systems for fuel, particularly during the night when drive-offs are most common. However, this measure hasn’t stopped customers from paying a small amount and then filling up with a significantly larger value of fuel before driving off. It’s worth noting that the pre-payment system in the United States functions differently, dispensing only the prepaid amount.
The franchisee who spoke with The Australian disclosed that he has been subjected to violent threats on multiple occasions after requesting prepayment from customers he suspected wouldn’t pay.
Police have been unresponsive to reports of drive-offs due to being overwhelmed, and many offenders simply claim to have forgotten to pay. Some offenders employ stolen or cloned fake license plates, making it impossible to link the plates to the driver.
The Australian 7-Eleven network is currently up for sale, and the owners, the Withers and Barlow families, anticipate a multibillion-dollar windfall.
A spokesperson for 7-Eleven stated that franchisees, as per their agreements, are obligated to pay the retail price for any fuel stolen while it is under the custody of the franchisee. They emphasized that once fuel is delivered to the stores by 7-Eleven, the franchisees have effective control over it, including enabling the pumps and dispensing fuel.
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