2022-7-Eleven Franchisee Who Rebelled Against Company Loses in Court

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OSAKA, Japan — Mitoshi Matsumoto, the person who has waged a David-and-Goliath marketing campaign in opposition to the Japanese comfort retailer large 7-Eleven, stood in entrance of a roomful of the corporate’s franchisees on Thursday, bowed deeply and apologized.

Mr. Matsumoto has spent the final two and a half years combating in courtroom for management of a 7-Eleven retailer that the corporate pressured out of enterprise after he refused to function it 24 hours a day, seven days per week. His wrestle has turn out to be a rallying level for 1000’s of comfort retailer house owners throughout the nation who’ve bristled in opposition to the corporate’s inflexible management of their franchises, hoping {that a} victory would assist them win a measure of independence.

However on Thursday afternoon, a choose ordered Mr. Matsumoto to instantly hand his retailer within the Osaka suburbs, which he opened in 2012, over to the corporate and pay round $845,000 in estimated damages for misplaced enterprise.

After the ruling, Mr. Matsumoto stated that he was sorry to have let his supporters down, however that he supposed to combat on and enchantment the ruling. “It could have been higher if we’d gotten an excellent consequence, however the push to shorten hours goes to maintain shifting ahead,” he stated.

In a press release, a 7-Eleven spokesman stated that the ruling was “applicable,” including that the corporate would “work even more durable for the patronage of consumers within the area.”

The case’s ultimate end result is more likely to have profound implications for the relationships between Japan’s comfort retailer firms and the greater than 50,000 retailers they management. 7-Eleven’s areas account for greater than 40 p.c of these shops, and for many years the corporate has been seen because the business customary.

Mr. Matsumoto’s issues started in early 2019 when he determined he would shorten his retailer’s hours, closing 5 hours each evening in defiance of firm coverage. He was exhausted, labor had turn out to be more and more unaffordable, and he had determined that the income from staying open into the wee hours didn’t justify the prices.

It was a seemingly small act of insurrection. However standing as much as some of the highly effective and ubiquitous companies in Japan made him a star and uncovered the inside workings of an business that had lengthy been celebrated as a mannequin of effectivity.

Mr. Matsumoto’s determination set off a yearslong — and generally surprisingly petty — battle of attrition with the corporate. In its efforts to rid itself of Mr. Matsumoto, 7-Eleven employed non-public investigators to maintain tabs on his enterprise. It finally revoked his franchise, a call it stated it had made after quite a few buyer complaints and disparaging remarks posted by Mr. Matsumoto on social media.

After he sued to maintain his retailer, the corporate constructed one other, smaller one within the retailer’s parking zone and threatened to cost him for the development prices.

In 2020, Japan’s Truthful Commerce Fee issued a blistering report on the comfort retailer business’s enterprise practices. It warned firms to not abuse their energy over franchisees and advised that they might have run afoul of the nation’s antimonopoly legal guidelines.

Along with the calls for that shops at all times keep open, the fee cited different elementary issues with the business’s enterprise mannequin, together with deceptive recruiting practices and forcing retailer house owners to inventory extra merchandise than they may promote. The fee ordered the chains to develop a plan for enhancing their therapy of retailer house owners.

Earlier in 2020, the Covid-19 pandemic and ensuing state of emergency had prompted the corporate that controls the 7-Eleven chain, Seven & I Holdings, to allow some comfort retailer franchisees to close briefly or to restrict their hours.

Nevertheless it has continued to place obstacles within the path of those that want to maintain shorter hours, in keeping with Reiji Kamakura, the chief of the Comfort Retailer Union, a small group of householders that has struggled to develop within the face of robust opposition from the business.

“The pinnacle workplace has not modified its place that it needs house owners to finish shorter hours,” he stated.

Different issues have continued as effectively.

In March, a franchisee in Kagoshima Prefecture filed a criticism in opposition to 7-Eleven with the Truthful Commerce Fee over claims that the corporate’s representatives had overstocked his retailer with out his information, inflicting him to lose cash on unsold merchandise. A part of the corporate’s earnings come from promoting its branded merchandise to franchisees. That case remains to be pending.

Efforts by franchisees to wrest a better measure of management from 7-Eleven suffered a setback this month when a choose dominated in opposition to a gaggle of householders who had demanded the fitting to train collective bargaining in opposition to the corporate.

Mr. Matsumoto, by his personal admission, has not been an ideal consultant for the house owners’ trigger.

Personal investigators had collected proof in opposition to him that was utilized in courtroom, together with grainy video footage that the corporate stated confirmed him head-butting a buyer and sending a flying kick right into a automotive’s aspect panel. His legal professionals argued the photographs had been inconclusive.

Both approach, the complaints in opposition to Mr. Matsumoto had been irrelevant to the central subject of 7-Eleven’s relationships with its franchisees, stated Shinro Okawa, a member of Mr. Matsumoto’s authorized workforce. “House owners are gathered right here as a result of 24-7 operation is an issue.”

Mr. Matsumoto stated he was wanting ahead to the combat forward.

However he joked, “If I lose once more, I’m giving up and shifting to America.”

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