Profitable pizza chain Dominos is another recent example of a franchise operation in which underpayment is rife.
Evidence shows the franchisees of the fast food giant systemically underpaid workers by hundreds of thousands of dollars a year.
It was only after community outrage that the Fair Work Ombudsman moved on Domino’s to address the underpayments and fix its franchise system.
A recent report says Domino’s Pizza says it has recovered $1.1 million in unpaid wages and superannuation from its probe into staff complaints and an audit of stores across Australia.
The pizza chain says it has so far recovered $770,000 in unpaid wages and superannuation from its completed audit of 15 stores, and ongoing audit of another 41 stores.
It has also recovered $249,000 in wages and super after investigating 55 individual complaints, while another 19 complaints are still being examined.
Continued costs of introducing new technology is blamed for franchisees being required to seek to reduce costs elsewhere – namely labour costs.
The employment arrangements remain a problem for the franchisee who seek to reduce labour costs and franchisor maintains high levels of profit without the risk of being prosecuted for the underpayments.
Despite the Fair Work Ombudsman issuing of numerous notices against Domino’s, it continues to profit from its continuing business practice, registering a 25 per cent annual profit growth for the 2016-17 financial year.