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A Grudge Match in Japan: One Corner, Two 7-Elevens

HIGASHI-OSAKA, Japan — Throughout Japan, it might appear as if there’s a 7-Eleven on each nook.

Now, on a single nook in a working-class suburb of Osaka, there are two.

The bizarre pairing is the newest manifestation of a grudge match between one in every of Japan’s strongest firms and, arguably, one in every of its most cussed males.

Mitoshi Matsumoto, a franchisee, ran one of many two 7-Elevens till the chain revoked his contract in 2019 after he dared to shorten his operating hours. For over a 12 months, his retailer has sat empty as he and 7-Eleven have battled in courtroom over management of the store. Fed up and without end, the corporate selected a stopgap: It constructed a second store in what was Mr. Matsumoto’s car parking zone.

The battle’s final result will decide not simply who will get to promote rice balls and cigarettes from one tiny patch of asphalt and concrete. It might even have profound implications for 7-Eleven’s authority over tens of hundreds of franchise retailers throughout Japan, a part of a comfort retailer community so ubiquitous that the federal government considers it important to the nationwide infrastructure throughout emergencies.

7-Eleven has gone to stunning lengths in opposition to Mr. Matsumoto. It employed a group of personal investigators to look at his retailer for months, gathering grainy video that, the corporate asserts, reveals him head-butting one buyer and attacking one other’s automotive with a flying kick. It has additionally compiled a file of complaints in opposition to him, together with one over a bungled giveaway of “commemorative mayonnaise.” And now it says it plans to cost him for the price of constructing the second store subsequent to his.

The corporate maintains that it moved in opposition to Mr. Matsumoto just because he was a nasty franchisee. However he argues that it’s no coincidence that the corporate’s view of him dimmed sharply after he mentioned he would defy its inflexible demand that shops keep open across the clock.

Earlier than his seemingly small act of revolt, the corporate had deemed him a mannequin employee. He had acquired reward for, amongst different issues, having the very best gross sales of steamed pork buns in his area.

After his choice, 7-Eleven threatened his enterprise and ultimately minimize off his provides and sued to take over the shop. With its actions, Mr. Matsumoto says, the corporate is sending a message to different franchisees: The nail that stands out will get hammered down.

The battle enjoying out in an Osaka courtroom could have ramifications for 7-Eleven and the remainder of Japan’s main franchises, which management the overwhelming majority of the nation’s greater than 50,000 comfort shops. 7-Eleven accounts for practically 40 % of these, and its enterprise practices, for higher or worse, have lengthy been considered because the trade commonplace.

“The result of this trial could have an infinite impression,” mentioned Naoki Tsuchiya, an economics professor at Musashi College in Tokyo. “A loss could be a substantial blow to the corporate,” however a win would “shift the steadiness of energy away from the franchisees and towards company HQ.”

Mr. Matsumoto ran the primary of the 2 7-Elevens from its building in 2012 via the tip of 2019. Located on a busy road close to one of many largest personal universities within the area, the shop has been shuttered for 16 months, musty, darkish and gathering mud.

The second 7-Eleven, a scaled-down model of the store subsequent door, is being constructed as a service to the neighborhood, the corporate says, after residents expressed concern that the empty retailer was a safety problem. The brand new store has the knocked-together look of the momentary housing that springs up within the wake of a pure catastrophe. When the ending touches are placed on within the coming days, will probably be operated — 24 hours a day — by 7-Eleven itself.

For many of the seven years that Mr. Matsumoto operated his 7-Eleven, he faithfully carried out the calls for for round the clock operations, which increase company earnings however might be pricey for franchisees, who shoulder the labor prices. The tempo turned unsustainable, although, as assist turned tougher and dearer to search out — an issue that grew extra acute after his spouse’s loss of life from most cancers within the spring of 2018.

In February 2019, he introduced that he would shut his retailer from 1 a.m. to six a.m. every day. 7-Eleven started pressuring him to return to round the clock operations, his protection group wrote in courtroom filings. Mr. Matsumoto, who prides himself on being persistent and plain-spoken, didn’t again down.

He went to the information media and described the trade’s harsh labor circumstances, together with his personal days working 12 hours or extra. His story hit a nerve in a rustic the place overwork is rampant and typically deadly.

His willingness to criticize 7-Eleven in ways in which most different franchisees wouldn’t made him well-known. It additionally solid a light-weight on the hidden prices of ultraconvenience in Japan, the place comfort shops fulfill a lot of life’s every day wants and are sometimes held up as symbols of the nation’s outstanding effectivity and customer support.

7-Eleven stood down in its conflict with Mr. Matsumoto over his shorter hours. However his relationship with the corporate, which had at all times had some issues, reached a breaking level in October 2019 when he introduced that he would shut the shop completely for sooner or later, on New 12 months’s.

In late December, 7-Eleven notified him that it could revoke his contract until he took unspecified motion to revive a “relationship of belief.” It gave him 10 days.

The corporate mentioned it was responding to 2 issues. One, Mr. Matsumoto had attacked it on social media. Two, he had racked up lots of of buyer complaints. (It could later declare, with out offering proof, that it was the most important variety of any retailer in Japan.) It was the primary time, he mentioned, that the corporate had ever introduced the issue to his consideration. The corporate denies this.

The primary grievance got here within the months after the shop’s grand opening. Mr. Matsumoto and his spouse had papered the neighborhood with fliers promising a squeeze tube of “commemorative mayonnaise” to any buyer who confirmed up on the primary day.

The mayonnaise ran out in hours, and Mr. Matsumoto ended up telling lots of of buyers to come back again later that week to assert their present. Over a month later, one disgruntled buyer tried to money within the I.O.U., then fired off a scathing grievance when she was refused.

The opposite complaints vary from severe accusations — berating clients — to minor quibbles. The file additionally accommodates numerous complaints from former staff about pay and dealing circumstances that echo a few of Mr. Matsumoto’s personal complaints about 7-Eleven.

Mr. Matsumoto doesn’t faux that every little thing at his retailer was good. For years, he had been engaged in a heated battle over his car parking zone, the place clients of different companies would typically go away their vehicles for hours with out a lot as a thank-you.

By Japanese requirements, Mr. Matsumoto’s neighborhood is somewhat tough. Folks minimize in line. They cross the road in opposition to the sunshine. They aren’t afraid to provide a comfort retailer proprietor a chunk of their thoughts.

He gave pretty much as good as he received, he readily admits, and he was not in style with the neighbors. On a couple of event, a shouting match over parking areas ended with a name to the police. They at all times sided with him, Mr. Matsumoto mentioned.

7-Eleven had by no means appeared significantly within the occasional blowups, however after he declared that he was closing early, it started taking a really particular curiosity in them.

In the summertime of 2019, the corporate employed personal investigators to maintain tabs on Mr. Matsumoto’s retailer, it wrote in a courtroom submission. Perched in a close-by constructing, they spent months secretly filming the store’s comings and goings.

The result’s 7-Eleven’s evidential pièce de résistance: 5 movies of what look like confrontations between Mr. Matsumoto and numerous clients within the car parking zone. Two contain what the corporate says are the flying kick to the automotive and the head-butt, however it’s tough to make out a lot of the blurry footage introduced to the courtroom.

One other video reveals Mr. Matsumoto upbraiding a person in a white van. Two males loitering close by are surreptitiously taping the argument, and the corporate has crosscut shaky footage from their cameras with video taken from the balcony above Mr. Matsumoto’s store to provide a number of views on the alternate.

When approached for remark, a 7-Eleven consultant referred reporters to the corporate’s courtroom filings.

Mr. Matsumoto’s authorized group has years of expertise combating comfort retailer chains in courtroom, however one in every of his legal professionals, Takayuki Kida, mentioned that “there aren’t many instances which are full-out struggle, the place 7-Eleven is that this set on crushing somebody.”

It’s simple to see why, mentioned Mr. Tsuchiya, the Musashi College professor. The eye on Mr. Matsumoto has already helped spur change within the trade.

In September, a broad inquiry by Japan’s Truthful Commerce Fee concluded that the comfort retailer trade’s 24-hour-a-day coverage was unsustainable and ordered stores to give owners more flexibility or face doable authorized motion.

Underneath stress, 7-Eleven has elevated franchisees’ share of income and, throughout the pandemic, taken a extra lenient stance on operating hours. It isn’t clear how far the modifications will go or whether or not regulators will comply with via on their risk.

Mr. Matsumoto is bemused by 7-Eleven’s choice to construct a brand new store subsequent door to his. “Everybody had forgotten about me,” he mentioned throughout a latest go to to the development web site. “Now they’ve put me again within the information once more.”

As he watched a crane do excavation work, a passing bicyclist stopped to share just a few phrases of encouragement, urging Mr. Matsumoto to not let the “massive guys” win.

Final 12 months, Mr. Matsumoto says, the corporate supplied him 10 million yen, or greater than $92,000, to drop his case. The courtroom inspired him to simply accept the provide. However he wasn’t . Now, the corporate is making an attempt the other strategy. Its legal professionals have mentioned they’ll invoice him ¥30 million for building of the brand new retailer.

Both means, it’s the identical to him, Mr. Matsumoto mentioned. “It’s not in regards to the cash,” he mentioned. “It’s about one thing larger.”

The identical could possibly be mentioned for 7-Eleven. An indication in entrance of the development web site sums all of it up: The constructing is momentary.

Win or lose, the corporate plans to tear it to the bottom.

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