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7-Eleven Inc is bullish on entering the Indian market in the “near future” after terminating its master franchise contract with Future Retail on Tuesday.
In response to a detailed questionnaire, a 7-Eleven spokesperson said it was a mutual decision to terminate the master franchise contract. However, the convenience store chain said “7-Eleven remains confident in the Indian market and hopes to enter the market in the near future.” The spokesperson did not divulge more details on the partners it could possibly be in conversation with.
The retailer has been exploring an India entry since 2004 when it was in talks with Delhi-based Modi Enterprises. In February 2019, Future Retail had signed an agreement with 7-Eleven.
7-Eleven, which has over 77,000 convenience stores in 17 countries, had signed a master franchise agreement with a Future Retail Ltd arm, SHME Food Brands Pvt Ltd, to develop and operate 7-Eleven outlets in India. Future Retail had aimed to have at least 1000 stores in Mumbai with the first to be launched in March 2020.
Even before it could take off, Future 7-India Convenience Limited, which owned the master franchisee of 7-Eleven, reported a net loss of ₹9.61 crore in FY20, according to the company’s annual report.
However, on Tuesday, the Kishore Biyani promoted Future Retail said “the termination has been with mutual consent as the Future-7 was not able to meet the target of opening stores and payment of franchise fees. (There was) no financial or business impact on the company as this arrangement was at subsidiary company level.”
The Covid-19 pandemic delayed its plans even as Future Retail was struggling with its huge debt. Last year, Biyani decided to sell off the assets of the retail and wholesale businesses to Reliance Industries for ₹24,713 crore.
This is being opposed by Amazon who had invested ₹1,400 crore in Future Coupons Private Limited in 2019.