The franchisor-franchisee business model is one of the factors behind the 7-Eleven staff underpayment controversy, a Griffith Business School researcher says.
“Typically, franchisors tightly direct and audit product-related processes but is not accountable for outlet employees,” Dr Ashlea Kellner, Centre for Work, Organisation and Wellbeing, said.
“It’s the franchisee who is accountable for ensuring compliance with legal obligations. This leads to a great diversity in pay systems within franchises and consequently, significant underpayment for many employees in franchises.
“Franchisors often support franchisees by auditing behaviour, providing seminars and workshops, and developing wage determination tools.
“They can also respond to queries from franchisees and their employees but their involvement varies, partly because franchisors may fear that misinformation about pay or penalty rates could shift liability onto themselves.”
Dr Kellner, Professor David Peetz, Associate Professor Keith Townsend and Professor Adrian Wilkinson have carried out a study of existing research on management of industrial relations in franchises.