In her Appeal Court judgement, Judge Lewis ruled that a "...franchisee is not entitled to the benefit of rebates or early settlement discounts received by the franchisor from suppliers of goods".
This judgement is in stark contrast to the High Court judgement in 2004, which held the company liable to pass on all discounts and rebates to its franchisees.
The Appeal Court found that the High Court judges had erred in their judgement, in using a dictionary definition of the word "rebate" to mean "discount", given that the definition had not been read in conjunction with the disclosure document given to prospective franchisees by 7-Eleven, and that 7-Eleven's contract with its franchisees did not state that such rebates would be passed on to them.
The Judge found that a rebate is a reward from the supplier of products for good business done by the franchisor, and is only determined after orders have been placed. No individual franchisee can lay a claim to having created such a rebate, or to be entitled to it, said the judge. Trade discounts, on the other hand, must be passed on to franchisees, and this practice has been followed by 7-Eleven.
Judge Lewis also found that the franchisee Cancun Trading No 150 cc had not been misled by 7-Eleven in regard to discounts and rebates in any of its dealings prior to the franchisee signing the contract to buy his 7-Eleven stores.
Group Managing Director of Corporation Retail, formerly known as 7-Eleven Corporation, Angie Goff says: "The Group feels vindicated that justice has prevailed. We are delighted that this case is behind us and that the brand Friendly Seven Eleven can now grow from strength to strength.
"My directors and I wish to salute those loyal 7-Eleven franchisees who chose not to file claims for rebates, and who honoured their commitments in terms of their franchise agreements. These franchisees formed the backbone of our group and assisted us in the survival and growth of our 7-Eleven brand," adds Goff.
