Seven-eleven Japan To Set Up Franchise Network In China

(Thursday, May 29, 2008) - Seven-Eleven Japan Co. plans to develop a network of franchise stores in China, taking over from its U.S. subsidiary.

The Seven & i Holdings Co. (TSE:3382) unit recently established Seven-Eleven China Co. The Beijing-based subsidiary will grant Taiwanese food retail giant Uni-President Enterprises Corp. -- which already operates roughly 4,800 7-Eleven stores in Taiwan -- a license to open franchise locations in Shanghai.

Seven-Eleven Japan, which currently has 64 directly managed stores in Beijing, believes that its product control and distribution systems are ready to cope with a franchise network. It will first begin by opening stores in the Chinese capital by this fall, before expanding to other cities.

Currently, U.S. subsidiary 7-Eleven Inc. has approximately 1,300 franchise stores in China. As part of efforts to boost the profitability of its operations in the Chinese market, Seven-Eleven Japan will also provide expertise on efficient operations to those stores as well.

Seven-Eleven Japan originally imported convenience store know-how from 7-Eleven, the U.S. pioneer of 24-hour convenience stores. The U.S. franchise operator, which ran into financial trouble in the 1980s, turned to its largest franchisee, Ito-Yokado, currently part of Seven & i Holdings, for assistance. The U.S. firm became a wholly owned subsidiary of Seven-Eleven Japan in 2005 .

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