Japanese convenience store owners who have been fighting for a break from their grueling 24-hour, 365-day-a-year operations may be closer to shorter opening hours.
In a report on Wednesday, Japan’s Fair Trade Commission took the industry’s top chains to task for business practices that have generated enormous profits by pushing growing operating costs onto franchise owners.
The report, which was based on a survey of more than 8,400 convenience store franchisees, detailed numerous problems with the companies’ business models, starting with the franchisee recruitment process and extending to the most fundamental aspects of store management.
It is the most comprehensive examination to date of an industry that is as opaque as it is ubiquitous. Companies, like 7-Eleven, Lawson and FamilyMart, have closely guarded their business practices, including from their own franchisees, making it difficult to ascertain the extent of the issues facing them.
Among the most serious problems cited by the report were companies coercing franchisees into buying more products than they could sell, pushing them to maintain 24/7 operating hours and making misleading recruitment promises to store owners about the prospects for their new businesses.
The commission warned that those practices, among others, may have run afoul of Japan’s antimonopoly law by “abusing a superior bargaining position.” It requested that the country’s eight leading convenience store chains submit a plan for taking corrective measures. The commission also said it would seek further information about possible legal violations by the companies.
Convenience stores are ubiquitous in Japan, with more than 55,000 locations so widely spread throughout the nation that the government considers them part of the national infrastructure.