News ReleaseAction Plan to Support and Build Stronger Relationships with Franchise Stores


TOKYO, JAPAN, 4 25, 2019

Lawson, Inc. (Lawson) announces that an action plan has been formulated to support and build stronger relationships with franchise stores of convenience store chains in response to the survey results of “Case Examples by Convenience Store Chain Affiliates” conducted by the Ministry of Economy, Trade and Industry. The outline of this action plan is indicated below.

In order to realize Lawson's corporate philosophy, “Creating happiness and harmony in our communities,” we believe that there must be a strong partnership between franchise stores and headquarters. In addition, to play a role as part of the social infrastructure under normal circumstances and as a lifeline during natural disasters, we aim to be close to people’s daily lives and become an essential part of our communities.
At the same time, we face serious issues: the environment surrounding franchise stores is changing daily, costs are rising associated with surging labor costs, and the labor shortage has become more severe due to changes in the social environment, such as low birth rates and the aging population. Lawson is working toward labor saving for store operations by introducing digital technology to achieve the sustainable growth together with franchise stores. We launched a 1,000-day Action Plan over three years from 2016, and took a variety of measures to support franchise stores and cope with the labor shortage. Through our initiatives to reduce labor expenses and disposal losses, which are two major costs for franchise stores, we have implemented measures to reduce labor costs equivalent to 6.0 man hours/day and 157,320 yen/month*.
By strengthening these efforts and taking measures to increase the profitability of franchise stores, we aim to further reduce costs equivalent to 7.0 man-hours/day and 183,540 yen/month*. We support franchise stores that manage the most important stores, which are the point of contact with customers.
* Ministry of Health, Labour and Welfare: Calculated using 874 yen as the national weighted average of a minimum wage per hour in each region in fiscal 2018, with one month as 30 days.

Action Plan to Support and Build Stronger Relationships with Franchise Stores
In the survey results of the Ministry of Economy, Trade and Industry, we were able to confirm the decrease in the satisfaction of franchise stores and the severe shortage of labor. We will continue to promote support for franchise stores, which we have been strengthening for four years, and implement new initiatives. With regard to support for franchise store management as a measure against labor shortages, and items such as shorter business hours and store opening policies, which are industry-wide issues, we have summarized headquarter initiatives from the past to the present as well as further initiatives.

Outline of action plan
Initiatives from the past to the present Further initiatives
(1) Franchise stores business support
a) Reduce labor and manpower required in store operation by using digital technologies
Since 2016, as a 1,000-day Action Plan, we worked to strengthen support for franchise stores and implemented measures to reduce labor costs equivalent to 6.0 man-hours/day and 157,320 yen/month (introduction of semi-automatic ordering system and POS cash register with automatic change dispensers). Implement new measures (e.g. new store computer replacement and introduction of self-cash register) in fiscal 2019, aiming to reduce labor costs equivalent to 7.0 man-hours/day and 183,540 yen/month.
b) Reduce disposal losses
We recommended operation such as markdowns and selling out fried food to reduce disposal costs by approx. 20% from 2018. Consider the continuation of efforts on the extension of acceptable sales time and the introduction of a new program for the reduction of food losses.
c) Support hiring and improve retention of existing crews and hiring efficiency
Predicting labor shortages in the future, we implemented support for franchise stores through LAWSON STAFF, a temporary-employment agency that was established in 2014. We worked to develop an educational system for the crew and launch a communication tool to retain the crew. Consider the introduction of a crew-matching app and a tool for hiring and educating crews from overseas, which matches the needs of stores and the crew.
d) Enhance security
Introduced POS registers with automatic change dispensers (introduced in all stores by February 2019). Because no cash can be deposited or withdrawn, theft losses decreased dramatically (50 cases in 2018→ after the introduction of POS cash register with automatic change dispenser: only 1 case), which provides indirect support for hiring crews.
e) Investment in existing store
To support franchise stores, invested 52.77 billion yen (in fiscal 2018) in introducing a semi-auto ordering system, tablet devices and POS cash registers with automatic change dispensers for labor-savings in store operation, and incurring disposal losses and utility costs. Plan to invest 85.5 billion yen in fiscal 2019 to strongly support the management of existing stores.
(2) Response to shorter business hours
Shorter hours at 41 stores in 21 prefectures nationwide.
・When concluding a franchise contract, specify in the confirmation document that they may choose shorter hours of operation.
Two stores in the Kanto and Kansai areas will start shorter hour operations from May.
・Continue to respond consultation from each store that requests the start of shorter hours.
(3) New store opening policy
・Since its foundation, we have prioritized the management of existing stores and focused on expansion into new areas while avoiding competition between LAWSON franchise stores. We opened stores in all prefectures in Japan in 1997.
・Recommend multiple store ownership for stabilization of franchise store management. (Approx. 70% of stores are multiple store operation.)
Consider introducing franchise contract package, making it easier for owners to try operating multiple stores.
(4) Communication with franchise stores
Developed a system to directly hear opinions from franchise stores. Established numerous systems to hold direct dialogues between headquarter executives, including the president, and franchise stores, including such as Franchise owner welfare, board meetings. Established the “Lawson Franchise Store Advisory Committee” in April 2019 and enhanced the exchange of opinions with stores for better communication with franchise stores.