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

HIGASHI-OSAKA, Japan – Across Japan, it can seem like there’s a 7-Eleven on every corner.

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

The unusual pairing is the latest manifestation of a grudge game between one of Japan’s most powerful corporations and one of its most tenacious men.

Mitoshi Matsumoto, a franchisee, operated one of the two 7-Elevens until the chain revoked his contract in 2019 after daring to cut its operating hours. His shop has been vacant for over a year when he and 7-Eleven battled it out in court for control of the business. Annoyed and with no end in sight, the company decided on a stopgap solution: It built a second store in the former parking lot of Matsumoto-san.

The outcome of the conflict will not only determine who can sell rice balls and cigarettes made from a tiny piece of asphalt and concrete. It could also have profound implications for 7-Eleven’s authority over tens of thousands of franchise stores across Japan that are part of a convenience store network so ubiquitous that the government is using it for national infrastructure in an emergency considered important.

7-Eleven has made surprising efforts against Matsumoto-san. It hired a team of private investigators to watch its business for months and collect grainy video that the company claims shows him bumping a customer in the head and attacking someone else’s car with a flying kick. It has also put together a dossier of complaints against him, including one about a botched giveaway with “memorial mayonnaise”. And now it is said that there are plans to bill him for the cost of building the second store next to his.

The company claims it took legal action against Mr. Matsumoto simply because he was a poor franchisee. But he argues that it is no coincidence that the company’s view of him deteriorated badly after saying he would defy strict demand that stores stay open 24/7.

Before his seemingly minor rebellion, the company had viewed him as a model worker. Among other things, he was praised for having the highest sales of steamed pork rolls in his region.

Following his decision, 7-Eleven threatened its business and eventually cut its supplies and sued to take over the store. With its actions, says Matsumoto, the company is sending a message to other franchisees: the nail that is sticking out will be knocked down.

The battle in an Osaka courtroom will affect 7-Eleven and the rest of the major Japanese franchises that control the vast majority of the country’s 50,000+ convenience stores. 7-Eleven makes up nearly 40 percent of that, and its business practices, good or bad, have long been considered the industry standard.

“The outcome of this study will have a huge impact,” said Naoki Tsuchiya, an economics professor at Musashi University in Tokyo. “A loss would be a major blow to the company,” but a win would “shift the balance of power away from the franchisees and towards corporate headquarters.”

Mr. Matsumoto operated the first of the two 7-Elevens from its construction in 2012 through late 2019. The store is on a busy street near one of the largest private universities in the area and has been closed for 16 months. dark and dusty.

The second 7-Eleven, a scaled-down version of the store next door, is being built as a neighborhood service, the company said after residents expressed concern that the empty store was a security concern. The new store looks like the makeshift housing created after a natural disaster. When the finishing touches are made in the coming days, it will be operated 24 hours a day by 7-Eleven itself.

During most of the seven years that Mr. Matsumoto ran his 7-eleven, he faithfully met the requirements for 24/7 operations that increase corporate profits but can be costly to franchisees who pay the labor costs. However, the pace became unsustainable as it became more difficult and expensive to find help – a problem that worsened after his wife died of cancer in spring 2018.

In February 2019, he announced that he would close his shop from 1 a.m. to 6 a.m. every day. 7-Eleven pressured him to operate around the clock, his defense team wrote in court files. Mr. Matsumoto, who takes pride in being persistent and clear, did not give in.

He hit the news media describing the tough working conditions in the industry, including his own working days of 12 hours or more. His story hit a nerve in a country where overwork is widespread and sometimes fatal.

His willingness to criticize 7-Eleven in a way that most other franchisees wouldn’t make him famous. It also sheds light on the hidden cost of ultra-convenience in Japan, where convenience stores meet many of life’s daily needs and are often viewed as symbols of the country’s remarkable efficiency and customer service.

7-Eleven resigned in his shorter hours in his encounter with Matsumoto-san. But his relationship with the company, which has always had some problems, reached a breaking point in October 2019 when he announced that he would close the store completely for a day on New Year’s Day.

At the end of December, 7-Eleven informed him that it would revoke his contract, unless he had taken unspecified measures to restore a “relationship of trust”. It gave him 10 days.

The company responded to two problems. First, Matsumoto-san attacked it on social media. Second, it had collected hundreds of customer complaints. (It was later claimed, without evidence, to be the largest number of stores in Japan.) It was the first time the company had made him aware of the problem. The company denies this.

The first complaint came in the months after the store opened. Mr. Matsumoto and his wife had papered the neighborhood with leaflets promising a squeeze tube of “memorial mayonnaise” to every customer who showed up on the first day.

The mayonnaise ran out within hours, and Matsumoto-san ended up telling hundreds of shoppers to come back later that week for their gift. Over a month later, a disgruntled customer attempted to redeem the IOU and then made a scathing complaint when it was denied.

The other complaints range from serious allegations – verbal abuse of customers – to minor disputes. The dossier also contains a number of complaints from former employees about wages and working conditions, which mirror some of Mr Matsumoto’s own complaints about 7-Eleven.

Mr. Matsumoto does not pretend that everything in his business was perfect. For years he had been involved in a heated battle for his parking space, in which customers of other companies often left their cars for hours without a thank you.

By Japanese standards, Mr. Matsumoto’s neighborhood is a bit rough. People cut in a line. You cross the street towards the light. They’re not afraid to give a shopkeeper some of their thoughts.

He gave as best he could, he willingly admits, and he was not popular with the neighbors. On more than one occasion, a screaming competition over parking lots resulted in a phone call to the police. You were always on his side, said Matsumoto-san.

7-Eleven never seemed particularly interested in the occasional explosions, but after declaring it was going to close early, it began to arouse a very specific interest in them.

In the summer of 2019, the company hired private investigators to keep an eye on Mr Matsumoto’s business, it wrote in a lawsuit. They sat in a nearby building and secretly filmed the comings and goings of business for months.

The result is 7-Eleven’s piece of evidence: five videos of apparent confrontations between Mr. Matsumoto and various customers in the parking lot. Two of these, according to the company, involve the flying kick in the car and the headbutt, but it’s difficult to see much of the blurry footage presented to the court.

Another video shows Matsumoto-san reprimanding a man in a white van. Two men loitering nearby are secretly tapping the argument, and the company has crossed shaky footage from their cameras with videos from the balcony above Mr. Matsumoto’s store to offer different perspectives for exchange.

When a 7-Eleven representative was asked to comment, he referred reporters to the company’s court files.

Mr. Matsumoto’s legal team has years of experience fighting convenience store chains in court, but one of his lawyers, Takayuki Kida, said: -Eleven aims at annihilating someone. “

It’s easy to see why, said Mr. Tsuchiya, a professor at Musashi University. Paying attention to Mr. Matsumoto has already helped drive change in the industry.

In September, a comprehensive investigation by the Japanese Fair Trade Commission concluded that the convenience store industry’s 24-hour policy is unsustainable and ordered stores to give owners more flexibility or possible legal action .

Under pressure, 7-Eleven has increased its franchisee share of sales and has taken a milder stance on operating hours during the pandemic. It’s not clear how far the changes will go or whether regulators will address their threat.

Mr. Matsumoto is amused by 7-Eleven’s decision to start a new business next to him. “Everyone had forgotten me,” he said recently during a visit to the construction site. “Now they got me back on the news.”

While watching a crane dig, a passing cyclist stopped to say a few words of encouragement and told Mr. Matsumoto not to let the “big boys” win.

Last year, Matsumoto said, the company offered him 10 million yen, or more than $ 92,000, to drop his case. The court encouraged him to accept the offer. But he wasn’t interested. Now the company is trying the opposite approach. The lawyers have announced that they will charge him 30 million yen to build the new business.

Either way, he feels the same way, said Matsumoto-san. “It’s not about the money,” he said. “It’s about something bigger.”

The same applies to 7-Eleven. A sign in front of the construction site sums it up: The building is temporary.

Win or lose, the company plans to knock it down.

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