Future Retail announced that it has terminated its two year old franchise agreement with 7-Eleven Inc in order to open and manage the global eponymous brand stores as a master franchise in India.
"The termination has been with mutual consent as the Future-7 was not able to meet the target of opening stores and payment of franchisee fees. No financial or business impact on the company as this arrangement was at subsidiary company level," FRL said in a statement.
The two companies decided to mutually terminate the agreement. This was first announced in 2019 with an agreement that the Kishore Biyani-owned retail company will develop and operate the US company's convenience stores in the country. Future had said they will open their small format stores starting with Mumbai in 2020 and will stock fresh food and beverages, over-the-counter products, and also have cafes within the outlets.
The stores were pitched against round-the-clock convenience store chain Twenty Four Seven, promoted by Modi Enterprises, and In & Out, which is run by state-owned Bharat Petroleum Corp. Ltd.
However, the restrictions due to Covid-19 and rising debt derailed the plans wherein Future Retail witnessed itself being burdened with a net debt of Rs 12,989 crore with the entire shareholding of the promoters being pledged with lenders by March 2020.
In August last year, Reliance Retail Ventures agreed to buy Future Group retail assets on a slump sale basis for about Rs 25,000 crore. The deal is yet to be completed.