‘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.

The embattled company released a press statement on Friday expressing its disappointment in its franchises, before the CEO stepped forward yesterday afternoon to announce an independent investigation into the issues highlighted by the Fairfax and Four Corners investigation. This morning the company announced it will spend millions of dollars to pay storeholders to leave their businesses as it tries to head off the deepening crisis.

But while the company has come forward and attempted to address the issues, Mango Sydney managing director Fern Canning has said the original statement was “disheartening”.



“It used the word ‘disappointed’ – given the enormity of the situation, that felt weak – like a parent scolding a child rather than a retail giant acknowledging fraudulent and exploiting activities of their franchisees,” she said.

Canning said the company’s update issued by the CEO yesterday was “hard to comprehend” given it was the first update since the company’s original media statement since last Friday.

“A more systematic crisis response would have been expected from such a major retailer,” she said.

Media response

On what should have happened Canning said a “media response unit should have been set up over the weekend with a key spokesperson nominated to ensure the filtration of transparent and open communication throughout the most crucial initial 72 hours”.

The process they are undertaking is as important to communicate as any final outcomes – an effective, open and honest process could save them,” she said.



Tony Jaques, owner and director of strategic consulting company Issues Outcomes, said when it comes to a “reputation, and potentially legal crisis ‘no comment’ is just not good enough”.

“Nor is it good enough to pass all the blame onto franchisees,” he said.

“7-Eleven must have known about the upcoming Four Corners program, but reportedly declined to appear,” he said.

“We can assume this was done on either legal or public relations advice, but was it the right decision?

“It goes without saying that it’s plain dumb to throw yourself on the mercy of a crusading TV program, especially one with the credibility of Four Corners. And we know from what has already been published that the company was very well aware of major problems at its outlets,” he said.

Internal communications

On the approach 7-Eleven needs to undertake Red Agency Sydney associate director Grant Richmond-Coggan said franchises such as 7-Eleven “need to accept that communication is an essential channel to maintain and open dialogue with each store”.

“By having this proactive internal communication as part of the franchise culture, companies will be in a much better position to hear of, and deal with, any issues that may arise before they enter the public space and become a wider PR issue or crisis,” he said.



Richmond-Coggan said for 7-Eleven this issue of “human exploitation has the potential to completely and greatly damage trust in the brand and cause shoppers to head elsewhere.”

His advice to the embattled retail chain was to “communicate on the level of human emotion, react with sympathy and accept the disgrace of the situation, moving the conversation away from what they have done to what they are doing to rectify it”.

“As with any PR crisis if a communications void is left, the brand has no possibility of keeping any control of the narrative, the empty space will just be filled with more negative conversations, allegations and rumours,” he said.

“7-Eleven must take positive steps such as fully compensating aggrieved workers and re-configuring the business model so this does not happen again.”

Mango’s Canning was in agreement, saying Australians “may be forgiving provided responsibility is taken and the path to redemption is openly shared”.

“And that means communicating what 7-Eleven HQ is doing to engage key stakeholders and ensure they are looked after whilst future-proofing the business to guarantee no repeat offenders,” she said.

National conversation



While declining to comment on the situation specific to 7-Eleven, Weber Shandwick head of corporate and public affairs practice Jacquelynne Willcox said the agency advises companies in similar situations to be aware “of the national conversations underway”.

“In this case, there has been a national discussion underway about employment policy, the effectiveness of Fair Work provisions in protecting lower paid or vulnerable workers, campaigns about hiring cheaper overseas labour and the effectiveness of visa programs vis-a-vis safety provision for foreign students,” Willcox said.

She said the wider picture issues “can play into the issue and its management beyond the initial charges”.

But while it is widely agreed 7-Eleven has made some errors in handling the situation, Canning said “they have a brief window to still get it right”.

“Yesterday’s statement is a step in the right direction,” she added.

However Jacques is on the other side of the fence.

“The 7-Eleven controversy is just starting and the company are showing every sign of getting it wrong right from the beginning,” he said.

Miranda Ward


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