business

Former 7-Eleven store owner sues firm over contract termination

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Matsumoto's store has been closed since January, as he can no longer purchase goods following the termination of his contract and has no inventory left.

He can no longer purchase goods from 7/11, yet he has managed to keep his store open, according to previous articles here, by selling locally procured goods!

I personally hope he wins!

12 ( +14 / -2 )

Obviously he won't win his case because he has no legal argument, only an emotional plea. It's a noble cause though, and he knows he'll lose the case as the point is the optics of the system trying to quiet him.

I don't believe the convenience stores will shift away from the 24-7 model though.

2 ( +3 / -1 )

I don't know why anybody would want a 7/11 franchise at this point. Pay them a bundle of money, sign a contract, and a year later the franchisor opens a competing 7/11 just across the street from you. Great for them, but abusive of the franchisees - who lose half their business. I am shocked there is nothing in the contract to prevent them from doing this. Most franchise contracts guarantee the franchisee that they have exclusive rights to a defined area.

6 ( +6 / -0 )

Why not stay open as an independent, or do the big brands have the supply chain sewn up?

2 ( +2 / -0 )

Obviously he won't win his case because he has no legal argument,

He clearly does have a legal argument, which is that 7-11 breached the terms of its agreement with him by terminating it for reasons it was not legally entitled to.

Whether or not this is a strong argument that is likely to win in court I can't say, but its inaccurate to say he has no legal argument.

2 ( +3 / -1 )

I don't know if he'll make it, but I do hope the franchise will be required to cite some of these "customer complaints", assumedly from people with late night munchies. If they did care about the customers would emptying the store be a suitable approach?

As mentioned above I hope he continues under a new name to gauge the support of the people. I'd go!

2 ( +2 / -0 )

... and also for the sake of franchise store owners across Japan (similarly experiencing a labor shortage)

Let's see how many of his fellow franchisees pitch in for his legal costs.

0 ( +0 / -0 )

I don't believe the convenience stores will shift away from the 24-7 model though.

Many already have! I personally know of 3 (2 Lawsons/1Family Mart) I pass everyday on my way to work, that are closed from 1AM until 6AM. They started closing down last year around the time that this issue picked up steam here.

7/11 plays the corporate bully here, as he could stay open 24/7 but he would be forced into accepting staff from corporate headquarters and also be forced into paying them substantially higher wages as well, putting him into the red, and eventually forcing him to shut down.

7/11 would still make money by allowing him to stay open shorter hours, it's their image that they are worried about!

2 ( +2 / -0 )

He's taken the correct action - but why would anyone want to work for 7-11?

1 ( +1 / -0 )

Many already have

Interesting! Well then it’s up to 7-11, but if other convenience stores move away from 24/7 then that’s an open market. If you’re drunk and hungry at 2:30, or if you go to work at 5 am and want something on the way, you’ll end up at 7-11, so they’ll capture the late night/early morning market.

Regarding going indie, he certainly could, but it’s a gamble. Being part of the franchise brings name recognition, and all the supply end is handled by the company, as well as promotions, etc. Going indie means he needs to get his suppliers down on lock, and he won’t be able to order at the quantities and negotiate the prices that 7-11 will be. That said, who knows, maybe more people want mom and pop places again.

0 ( +0 / -0 )

What sucks about this case is that 7/11 will likely win the case because they have the strongest case from a legal standpoint. The manager may have human side of things but 7/11 has the legal side.

2 ( +2 / -0 )

@Commanteer Actually that's a problem with other franchises, such as (one?) if the fast food restaurants. I can't remember if it was either McDonalds, KFC, or both? I read stories about franchises being given to anyone, which was good for the company, but not the franchise owners.

0 ( +0 / -0 )

He could pull a generic and rename the store 7-10. Cant trademark numbers. How many havent seen Frosting Flakes (generic Frosted Flakes) or Jackett (generic Gillette [razors])?

0 ( +0 / -0 )

I rather like the idea of selling local items and produce.

1 ( +1 / -0 )

I forsee vending machine design go into overdrive. A store with aisles of them - pay as you go. No clerk, just security camera and detector at entry that sends signal to owner or contracted security group ( of 30% of businesses - not a monopoly) for review and then submitting photo from camera and details to police.

0 ( +0 / -0 )

...7/11 argument for terminating contract - there had been numerous customer complaints about his store.

Store owner may have a good chance to win the case since there is already a precedent of other stores doing the same shortened hours. To add, he has strong evidence - there is an actual labor shortage in JP. The facts are on his side vs. 7/11 weak argument.

0 ( +0 / -0 )

He should have done more research before stepping into this business. That is the risks involved in being an owner. The mistake is many owners get in for strictly the profits but there are hidden gems that one forget to look at more thoroughly. Having been in this business I learned that lesson a long time ago. If your going to get a franchise, do not become the employed manager, be the owner. Follow the day to day admin duties until you can get freedom from that. Hire your staff accordingly. In this case this owner became an employee of the business instead of the other way around and lost his way with no time for his personal life. That is a common business mistake. When I bought my first farm I did not become the farmer, I hired staff to run the farm I'm just the owner and keep an eye from time to time and hence had my freedom.

0 ( +1 / -1 )

@rcgivillian1 - can you provide more details please - were you in Japan ? What you say makes sense, though there are contradictory Laws in Japan that make one such agreement untenable without a prior contractual clause being agreed upon and understood.... the latter, could become an interesting arguing point, which if won against, could seriously damage the whole enterprise, if not shut them down.

0 ( +0 / -0 )

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