Osaka, Japan — Hikaru Matsumoto, who launched a David and Goliath campaign against Japanese convenience store giant Seven-Eleven on Thursday, stood in front of a room full of the company’s franchise stores, bowed deeply and apologized. did.
Mr. Matsumoto has been fighting in court for the past two and a half years over the management rights of Seven-Eleven, which was forced to close the business of Seven-Eleven, which refused to operate 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 oppose the strict control of franchise companies, hoping that victory will help them win some degree of independence. ..
However, on Thursday afternoon, the judge ordered Mr. Matsumoto to immediately hand over his store in the suburbs of Osaka, which he opened in 2012, to the company and pay about $ 845,000 for estimated damages to the lost business. I did.
After the ruling, Mr. Matsumoto said he was sorry to disappoint his supporters, but said he would dispute the ruling and appeal. “It would have been better if we had good results, but the promotion of time savings will continue to move forward,” he said.
A Seven-Eleven spokesman added in a statement that the decision was “appropriate” and that the company “worked harder to support customers in the region.”
The final outcome of this proceeding could seriously impact the relationship between Japanese convenience store companies and the more than 50,000 stores they manage. Seven-Eleven stores make up more than 40% of these stores, and for decades the company has been considered the industry standard.
Mr. Matsumoto’s problem began in early 2019 and, contrary to company policy, decided to close the store for 5 hours every night and shorten the store’s opening hours. He was exhausted, his workforce became more and more affordable, and he decided that the income from staying open in the early hours did not justify the cost.
It was a seemingly small act of rebellion. But by confronting one of Japan’s most powerful and ubiquitous companies, he became a celebrity and unveiled the inner workings of the industry, which has long been admired as a model of efficiency.
Matsumoto’s decision began with years of attrition warfare with the company, and sometimes surprisingly trivial. Seven-Eleven hired a private detective to drive Matsumoto away and oversaw his business. It finally canceled his franchise, which was the decision it made after many customer complaints and derogatory remarks posted by Mr. Matsumoto on social media.
After he appealed to keep his store, the company threatened to build another smaller one in the store’s parking lot and charge him for the construction.
In 2020, the Japan Fair Trade Commission released a ferocious report on the business practices of the convenience store industry. He warned companies not to abuse their power over franchisees, suggesting that they may have violated national antitrust laws.
In addition to the demand that stores are always open, the Commission has other fundamentals to the industry’s business model, including misleading recruitment practices and forcing store owners to stock more products than they can sell. Problem. The committee ordered the chain to make plans to improve the treatment of shopkeepers.
In early 2020, due to the Covid-19 pandemic and the consequent emergencies, Seven & i Holdings, the company that manages the Seven-Eleven chain, will either temporarily close some of its convenience store franchisees or open hours. Allowed to limit.
However, according to Reiji Kamakura, the leader of convenience store unions, the industry.
“Headquarters hasn’t changed its position of wanting owners to finish a shorter time,” he said.
Other problems continue.
In March, a franchisee in Kagoshima Prefecture filed a complaint against Seven-Eleven, alleging that a representative of Seven-Eleven bought too many stores and lost money on unsold merchandise. Part of the company’s profits come from selling branded products to franchisees. The proceeding is still pending.
Efforts by the franchisee to take greater control from Seven-Eleven were frustrated this month when a judge ruled against a group of owners who demanded the right to bargain collectively with the company.
Mr. Matsumoto, according to his own approval, does not completely represent the purpose of the owner.
Private investigators have collected evidence against him used in court. This includes grainy video footage stating that the company showed that he had headed his head to the customer and sent his flying kick to the side panel of the car. His lawyer argued that the image was not definitive.
In any case, the complaint against Mr. Matsumoto has nothing to do with the central issue of the relationship between Seven-Eleven and the franchisee, said Shinro Okawa, a member of Mr. Matsumoto’s legal team. “Owners gather here because 24/7 operation is a problem.”
Matsumoto said he was looking forward to the upcoming battle.
But he joked. “If I lose again, I will give up and move to America.”
