Future Retail on Tuesday announced the termination of Master Franchise Agreement with 7-Eleven after the company failed to meet the target of opening stores and payment of franchise fees.
In a regulatory filing to the stock exchanges, Future Retail said no financial or business impact on the company is expected as the arrangement was at the subsidiary company level. The agreement fell through as the Future-7 was not able to meet the target of opening stores and payment of franchisee fees."In February 2019, Future Group-owned Future Retail had signed a master franchise agreement with 7-Eleven Inc. to develop and operate 7-Eleven stores in India. It is set to open its first store in the financial capital by end of March next year.
The 7-Eleven stores in India failed to take off as Future group financial condition started deteriorating due to rising debt. The company posted a consolidated net loss of Rs 1,147.13 crore in Q1 FY22, higher than net loss of Rs 561.95 crore in Q1 FY21. Net sales increased 4.2% to Rs 1,415.67 crore in Q1 FY22 as against Rs 1,358.11 crore in Q1 FY21. Future Retail's interest expense increased 27.3% to Rs 354.27 crore in Q1 FY22 over Q1 FY21.
In August last year, the board of the company had approved the amalgamation of FRL along with other group companies with Future Enterprises to facilitate the Rs 24,713 crore deal to sell the retail and wholesale business to Reliance Retail. FRL said it "intends to pursue all available avenues to conclude the deal" to protect the interests of its stakeholders and workforce.
Future Retail is engaged in the business of retailing a range of household and consumer products through departmental store facilities under various formats. The company is primarily engaged in the business of multi-brand retail trade.
Shares of Future Retail were trading 0.97% lower at Rs 51.05 on BSE.
7-Eleven, Inc. is a multinational chain of convenience stores, headquartered in Dallas, Texas.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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