Franchise Pressure vs. Legal Rights
Case Review: Davaria Pty Limited v 7‑Eleven Stores Pty Ltd [2020] FCA 398
Franchisees were part of a class action against 7-Eleven.
At the same time, 7-Eleven was:
Negotiating store renewals, transfers, and wage repayments
Asking franchisees to sign deeds releasing claims (i.e. give up the class action)
So the concern was simple:
Were franchisees being pressured to give up legal rights just to keep their business?
The Problem
What the Applicants Argued
They said 7-Eleven was:
Creating real pressure (renewals, money, ongoing relationship)
Risking franchisees being misled or confused
Effectively forcing a choice:
Sign the release → keep your business
Don’t → risk your future
The Outcome
The Court basically said:
Yes, franchisees might feel pressure
But that doesn’t automatically mean it’s illegal or unconscionable
Key points:
No clear evidence of misleading or deceptive conduct
No proof of improper pressure or duress
7-Eleven was allowed to pursue legitimate commercial negotiations
Big line:
Commercial pressure ≠ unlawful pressure
Why 7-Eleven Got Through
They protected themselves by:
Putting everything in writing
Explaining the consequences clearly
Giving 14 days to consider
Recommending independent legal advice
That ticked the Court’s boxes.
The Lesson for Franchisors
You can negotiate hard.
You just can’t be misleading or deceptive.
If you:
Spell things out clearly
Give time to consider
Encourage legal advice
You can still push for a commercial outcome — even if it feels uncomfortable on the other side.
The Real Takeaway (This is the interesting bit)
This case draws a line:
Geowash case (before): dishonest system → smashed
This case: commercial pressure + transparency → allowed
Same space (franchising), totally different outcomes.
Judgement:
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2020/398.html
If you’re reviewing your franchise documents or unsure whether your disclosure stacks up — it’s worth getting clarity early.
We can walk you through it.