Future Retail announces termination of agreement for 7-Eleven stores in India
In February 2019, Future Retail had signed a master franchise agreement with 7-Eleven Inc. to develop and operate 7-Eleven stores in India
Future Group-owned Future Retail Limited on Tuesday announced the execution of termination of Master Franchise Agreement with 7-Eleven after over 2 years of plans to operate stores in India. The agreement fell through as the Future-7 “was not able to meet the target of opening stores and payment of franchisee fees.”
“Pursuant to Regulation 30 and other applicable provisions of SEBI Listing Regulations, we would like to refer to Master Franchise Agreement dated 28th February, 2019 executed between Future7-India Convenience Limited, Company’s wholly owned subsidiary (“Future-7”) and 7-Eleven INC, and also executed by the Company and Future Corporate resources Private Limited (“FCRPL”) as confirming party and Controlling Principal for developing and operating 7-Eleven® stores within India, is now terminated pursuant to execution of Mutual Termination Agreement (“the Agreement”) executed among the Company, Future-7, 7-Eleven, INC and FCRPL on 05th October, 2021,” the company said in a regulatory filing.
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.
Speaking to Mint earlier, Biyani had expressed excitement over the franchise agreement. He, however, said the company would focus on setting up 7-Eleven stores only in Mumbai, at least for the next two-three years.
In the modern convenience store format, India only has a handful of local players such as Samir Modi Enterprises-owned Twenty Four Seven, RJ Corp-owned J-Mart, and In&Out.In the modern convenience store format, India only has a handful of local players such as Modi Enterprises-owned Twenty Four Seven, RJ Corp-owned J-Mart, and In&Out.
Recently, Kishore Biyani-led Future Retail's deal with Reliance Industries' retail arm has been facing delay. The scheme of arrangement between Future and Reliance Retail entails the consolidation of Future Group's retail, wholesale, logistics and warehousing assets into one entity -- Future Enterprises Ltd -- and then transferring it to Reliance Retail.
However, in August 2019, Amazon had agreed to purchase 49 per cent of one of Future's unlisted firm, Future Coupons Ltd (which owns 7.3 per cent equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3 to 10 years.
After Future's deal with RRVL, Amazon had dragged Future into arbitration at the Singapore International Arbitration Centre (SIAC).
In October, an interim award was passed by the Emergency Arbitrator (EA) in favour of the US-e-commerce major that barred Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Amazon and Future have also filed litigations in Indian courts, including the Supreme Court, on the issue. The apex court had recently ruled in favour of Amazon by holding that the EA award was valid and enforceable under Indian laws.
Notably, the Kishore Biyani-led Future Retail Ltd, on August 28, said it has approached the Supreme Court against an order passed by the Delhi High Court to maintain status quo in relation to the deal and directing it to enforce the order of the Singapore-based Emergency Arbitrator.
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Business NewsCompaniesNewsFuture Retail announces termination of agreement for 7-Eleven stores in India
First Published:5 Oct 2021, 04:39 PM IST
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