Japan regulator tells convenience stores to stop forcing 24-hr rule on franchises

TOKYO (Reuters) - Japanese anti-monopoly regulators on Wednesday told convenience store chains to stop forcing franchises to stay open 24 hours a day, after complaints from franchise owners struggling to find late-night staff and make a profit during quiet business hours.

“We indicated that it could be a problem under the anti-monopoly laws. We requested immediate improvements and asked that improvements be reported to us,” the Fair Trade Commission said in a report.

The directive by the regulator, based on a survey of more than 12,000 convenience stores and 8,423 franchise owners, was aimed at Japan’s eight major convenience store operators, including Seven & i Holdings’ 7-Eleven chain and Lawson Inc..

The issue of convenience stores’ hours became a hot topic last year after franchise owners, struggling with the tightest labour market in more than 40 years, launched a campaign to change their contracts with the operators.

Stories of owners forced to work amid massive snowstorms or in the wake of a family death attracted national attention, putting operators under pressure to loosen franchise contracts and allow for shortened hours.

Japanese convenience stores began expanding in the 1970s as their 24-hour accessibility proved a perfect match with the country’s dense population and late-night work culture.

But many analysts say the industry now looks saturated, in light of Japan’s ageing population, slow economic growth and new competitors such as Amazon Prime.

Reporting by Tim Kelly and Ritsuko Ando; Editing by Clarence Fernandez & Shri Navaratnam