‘Like a parent scolding a child’: How has 7-Eleven handled a PR nightmare?
Four Corners’ investigation into 7-Eleven’s employment practices has led to huge brand damage. Miranda Ward examines how the brand has handled the attention, and whether it can recover.
Last night more than a million Australians tuned in to get the full picture on the 7-Eleven expose which has been teased in the media since the end of last week. The reputational damage to a brand which appears on most high streets has been immense, but its response so far has been at best – muted.
The joint Fairfax and Four Corners’ expose on the company’s staff exploitation and wage-fraud went to air last night after three days of media coverage, and without an appearance from a 7-Eleven representative.
Like most companies in that situation they are so paralysed and consumed by the perceived risks of being proactive, visible and engaged that they barely have time to consider the (even bigger) risks associated with doing nothing
Great insight. This will get worse if they find out that political donations kept this issue under the carpet for as long as it has. The privately owned parent company is owned by exceedingly wealthy individuals. Political assistance is not beneath people at this level.
Mumbrella you need to do more articles like this – great insights into what could have been done to save this.
Why would anyone voluntarily want to get their head kicked in by four corners? NO, it is often the best advice NOT TO APPEAR on that show. However, what they should have done is pre-empted it by announcing their own independent investigation using someone like a PWC, and published a written statement to the Ombudsman /Fairwork Australia. Very badly managed.
There is nothing that they can say as the model was broken from the beginning – how can you have a 50/50 revenue split in USA where employment costs are much lower than here, then adopt a 43/57 model here where the 43 pays for employment costs – should have been the other way around.
The 57 (Head Office) made all the money whereas the 43 (franchisee) was put on struggle street.
Leo burnett have been their agency for years. Do they have anything to say??
Hey! its old Mr Withers!
“I woulda got away with it too, if it wasnt for you pesky kids!”
I think the real question is – if you’re a marketing provider of 7 Eleven, at what point do you sacrifice your own morals by continuing your association with them? If you pass your defence of them off as a necessary part of your job, then you’re really no better than the franchisee owners who undercharged their employees in order to make their businesses profitable.
Spot on Sage Observer. The model is completely flawed, so we need to ask who has advised these franchisees to accept this type of arrangement and purchase this type of business. You don’t stand a chance of making a 7-11 profitable unless you adopt this type of ruthless and exploitative approach to staffing the 24-hour business.
I also agree with Richmond-Coggan and Canning that 7-11 has to look at fully compensating aggrieved workers and re-configuring the business model and forgiveness might come – but in the longer term. Because they’ve left it so late to accept any responsibility and take action (they knew about the Four Corners expose for a month before it aired), I think it’s too late. They’ve lost my business.
The point at which marketing company should withdraw to save their own skin is if it becomes apparent that they were working for people who knew their business was based on the abuse of workers. Or if their response it not adequate. Leo Burnett should probably make a statement in the next few weeks if they intend to keep taking their money.