7-Eleven Franchisee Who Rebelled Against Company Loses in Court

7-Eleven Franchisee Who Rebelled Against Company Loses in Court

Osaka, Japan – Mitoshi Matsumoto, the man who launched the David-and-Goliath campaign against Japanese convenience store giant 7-Eleven, stood in front of a room of the company’s franchises on Thursday, bowing his head and apologizing. Asked

Mr Matsumoto has spent the last two-and-a-half years fighting in court for control of the 7-Eleven store, which the company forced out of business when it refused to operate it 24 hours a day, seven days a week. His struggle has become a rallying point for thousands of convenience store owners across the country who have fought hard against the company’s tight control over their franchises, in the hope that a victory would give them some degree of independence. Will help

But on Thursday afternoon, a judge ordered Mr. Matsumoto to immediately hand over his store on the outskirts of Osaka to the company, which he opened in 2012, as an estimate of damages to the company. Pay $ 845,000.

Following the ruling, Mr Matsumoto said he regretted disappointing his supporters, but intended to fight and appeal against the ruling. “It would be nice if we could get a good result, but the pressure to reduce the hours would continue,” he said.

In a statement, a 7-Eleven spokesman said the decision was “appropriate”, adding that the company would “work harder to protect consumers in the region.”

The final outcome of the case is likely to have a profound effect on the relationship between Japanese convenience store companies and the more than 50,000 outlets they control. The 7-Eleven locations account for more than 40% of these stores, and the company has been seen as an industry standard for decades.

Mr Matsumoto’s problems began in early 2019, when he decided to reduce his store hours by closing five hours each night in violation of company policy. He was tired, the wages were becoming increasingly unbearable, and he had decided that the income from being open in the morning hours did not justify the expenses.

It was a seemingly small act of rebellion. But standing with one of the most powerful and ubiquitous corporations in Japan made him a celebrity and exposed the inner workings of the industry that has long been celebrated as a model of performance.

Mr Matsumoto’s decision sparked a year-long – and sometimes surprisingly small – war of resignation with the company. In an attempt to get rid of Mr. Matsumoto, 7-Eleven hired private investigators to monitor his business. This is the end Canceled His franchise, a decision that it said came after numerous consumer complaints and insulting remarks posted by Mr Matsumoto on social media.

He then sued the company for keeping his store. Another made, small He threatened to charge her for parking and construction costs.

In 2020, Japan’s Fair Trade Commission released a blister. Reports On the business practices of the convenience store industry. He warned companies not to abuse their power over franchises and suggested violating the country’s anti-monopoly laws.

In addition to demanding that stores always be open, the commission cited other fundamental issues with the industry’s business model, including misleading recruitment practices and forcing store owners to stockpile more than they sell. The commission ordered the chains to come up with a plan to improve their treatment of store owners.

Prior to that, in 2020, there were 19 epidemics and consequent emergencies. Pointed to the company Which controls 7-Eleven China, Seven & i Holdings, to allow certain convenience store franchises to close temporarily or limit their hours.

But it has continued to stand in the way of those who want fewer hours, according to Reggie Kamakura, leader of the convenience store union, a small group of owners who have struggled to grow despite strong opposition. Industry

He said that the head office has not changed its position that it wants to eliminate the owners for less hours.

Other issues persist.

In March, a franchise in Kagoshima Prefecture filed a complaint with the Fair Trade Commission against 7-Eleven, alleging that company representatives had overstocked its store without its knowledge, causing it to Money wasted on unsold goods. Some of the company’s profits come from selling its branded products to franchisees. That case is still pending.

Attempts by franchisees to gain more control over 7-Eleven suffered a setback this month when a judge ruled against a group of owners who sought collective bargaining rights against the company.

Mr Matsumoto, in his confession, has not been a good representative of the owners’ cause.

Private investigators gathered evidence against him that was used in court, including granular video footage from which the company claimed to have hit a customer in the head and a flying kick in the side panel of the car. Shown while sending. His lawyers argued that the photos were inconclusive.

Either way, the complaints against Mr. Matsumoto were unrelated to the central issue of the 7-Eleven’s relationship with its franchisees, said Shinro Okawa, a member of Mr. Matsumoto’s legal team. “Owners are gathered here because 24-7 operation is a problem.”

Mr Matsumoto said he was looking forward to further fighting.

But, he joked, “If I lose again, I’ll give up and go to America.”

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