Osaka court sides with 7-Eleven in franchise contract termination case

The Osaka District Court dismissed a lawsuit claiming 7-Eleven Japan Co unjustly terminated its contract with a convenience store franchisee over his decision to stop late-night operations.

The court also ordered Mitoshi Matsumoto, the 60-year-old former franchisee, to give up the store and pay damages to Seven-Eleven Japan Co.

Matsumoto has spearheaded a campaign among the nation's convenience store owners for shorter opening hours. In 2019, he unilaterally discontinued late-night business at his 7-Eleven in Higashiosaka, Osaka Prefecture, citing a lack of staff.

Matsumoto allegedly started closing his shop at 1 a.m. and 6 a.m. every day in February of that year. Additionally, he declared that on New Year's Day in 2020, the shop would be closed.

On December 31, 2019, Seven-Eleven terminated his employment, citing the 320 complaints the location had received between opening in 2012 and October 2019, which is nine times the national average.

Masanori Yokota, the court's presiding judge, accepted 7-Eleven’s argument that Matsumoto's sometimes physical attitude toward customers had damaged the operator's brand image and that the contract termination based on his treatment of customers was legal.

The operator was awarded damages of about 14.5 million yen by the court, and Matsumoto was also ordered to pay him roughly 110,000 yen per day he failed to return the store and its equipment following the cancellation.

Claiming that the Osaka court just parroted 7-Eleven's claims, he vowed to appeal the ruling and fight till the end.

Seven-Eleven opened a temporary location in the original store's parking lot, and it has been operating there since May 2021.