Couple left with nothing after investing $1m in 7-Eleven franchise

Franchisees ruined after 7-Eleven forces, then blocks sale of petrol station Thu 18 Jun 2026 at 4:56am In short: Two 7-Eleven franchisees say they have been left with nothing after the convenience store giant refused to renew their lease. 7-Eleven said the franchisees could sell the business, but a suitable buyer was rebuffed by head office without reason. The former business owners allege this has happened to many 7-Eleven franchisees across the country. Convenience giant 7-Eleven is accused of forcing and then blocking the sale of one of its franchises, leaving the owners to walk away with nothing after they invested more than $1 million into the business. The petrol and fast-food store in Kensington, in Sydney's eastern suburbs, has returned to the hands of head office, which will run the business as part of its corporate network. Jotika and Sunny Sharma purchased the franchise in 2015, taking out an ANZ loan of more than $1 million to pay the up-front goodwill fee and franchising fees. They have received no payment from 7-Eleven for the store, despite the goodwill and customer base built up over the decade they ran the business. "I asked them, how is it possible that I walk out of my investment? I took a hefty loan," Ms Sharma said. After a number of attempts by the couple to renew their lease, 7-Eleven declined. The Sharmas were forced to hand over the keys to their store last Wednesday and walk away with nothing. "I was devastated … I didn't know they were going to exploit me like this," Ms Sharma said. UNSW emeritus professor Jenny Buchan, who specialises in franchise law, says the practice is not fair, but it is legal. "The problem is that terms come to an end, so the franchisor's really got the upper hand, because they have got the right to do what they've done, which is take the site back," she said. In response to a request for comment from the ABC, 7-Eleven said: "We don't comment on individual franchise matters." "7-Eleven Australia works closely with its franchise network and takes its responsibilities seriously. We approach all franchisee matters in a fair and considered way," it said in a statement. Sale denied without a reason Across the country, hundreds of 7-Eleven stores operate through a franchise network model, in which individual operators buy the rights to operate a store under the popular brand and its guidelines. 7-Eleven head office takes more than 50 per cent of gross profit from the franchisee, and covers the store rent. In 2015, Jotika and Sunny Sharma entered into a 10-year lease agreement with the 7-Eleven head office for their Kensington store. It was the third 7-Eleven franchise they had purchased over almost two decades. They successfully sold their other stores in 2013 and 2020. Ahead of the expiration date of the Kensington shop, the couple were notified that the lease would not be renewed due to "the operational performance of the store", and that they had two options: find a buyer or walk away. They were granted two extensions to find a buyer, up until June this year. But when Sydney woman Deepti Pundir formally applied to buy the franchise, she was denied by 7-Eleven without a reason. "Three months, we were preparing ourselves, doing everything … I was like, how can they reject it on the basis of knowing nothing about us?" she said. Ms Pundir has worked as a duty store manager at Aldi for five years, has the capital to invest in the business after selling an investment property in January, and has had pre-approval for a bank loan. She said she was rejected the day after her first application was submitted to 7-Eleven and proceeded to apply again. She was then offered a virtual interview, but was again denied without a reason. "I do work with customers every day. I've managed a team for the last five years … I know I have got all the skills. I told them I'm ready. I'm ready and I have support," Ms Pundir said. The Oil Code, under which 7-Eleven stores fall as retailers of fuel, regulates conduct and ensures fair competition, transparency and dealings between fuel companies and franchisees. The code says the supplier — in this case, head office — cannot prevent the sale of a business by unreasonably withholding consent to the transfer. 7-Eleven did not answer questions from the ABC about Ms Pundir's application. Because the head office denied Ms Pundir's application, Mr and Ms Sharma were forced out of their store last week. They say the situation is taking a toll on their health. "I'm strictly on medication because my migraine is not stopping from thinking," Ms Sharma said. "How do I pay for my next [mortgage] repayment, which is in two weeks' time? I have no idea." Ms Sharma said she had spoken to other 7-Eleven franchisees across the country who alleged they were in a similar position. "There's more than 20 other families who got destroyed just like this," she said. Yesterday, 7-Eleven emailed franchisees, reminding them of the company's media policy and to not engage with the media. Ms Sharma said she did not have the money to hire a lawyer to challenge the outcome. Instead, she has reached out to financial regulators, politicians and the media. In a statement to the ABC, a spokesperson for the ACCC said: "We encourage businesses to report their concerns about compliance with the Oil Code to the ACCC". "The ACCC regulates the Oil Code of Conduct, but our role does not extend to investigating individual or contractual disputes," the statement said. "We do not act on behalf of consumers or businesses to resolve their individual disputes with businesses or organisations." 'Cheap way of acquiring business' In April 2024, 7-Eleven International, the parent company of 7-Eleven Australia, bought the Australian arm for $1.71 billion. The sale came after more than a decade of public scrutiny, including Four Corners exposing mass wage theft across 7-Eleven, which eventually led to thousands of staff collectively receiving $173 million in compensation. Loading...Dr Buchan said franchisees were particularly vulnerable at the end of a lease agreement and when management changed hands. "You buy a franchise because you are confident that the franchisor is offering a business that is going to be profitable," she said. "What's happened [to the Sharmas] isn't fair, but the law's not fair." Dr Buchan said she did not believe 7-Eleven had acted in good faith. "I think it's very wrong of them to lead the franchisee to believe that they could sell their business to an incoming franchisee," she said. "Logically, it doesn't make sense to terminate a franchise when the franchisees are good operators. "It's a very cheap way of acquiring a business for head office." Dr Buchan said there were no protections for people like the Sharmas under the franchising act because of a "gigantic escape clause". "The obligation to act in good faith does not prevent a party to a franchise agreement, or a person who proposes to become such a party, from acting in the party’s, or the person’s, legitimate commercial interests," the act says. Dr Buchan said it was a "huge loophole" that franchisors had "lobbied hard to keep". "It's very beneficial to them, but it's not really a very effective good-faith provision," she said. She believes the goodwill payment should be divided into three sections, leaving the outgoing franchisees with at least some compensation. "There should be recognition of the fact that the franchisee has done a really good job on that site and that there should be a component of goodwill for that franchisee when they finish, because they're leaving a valuable business," she said.