Abstract
The disposal loss of fresh food (ex. box lunch) delivered daily is one of the major problems faced by convenience stores. A franchisee of Seven Eleven, the largest convenience store in Japan, filed a lawsuit seeking the abolishment of restrictions set by Seven Eleven, the franchisor, including the restriction on price lowering as the consume-by date approaches. As a consequence, the Fair Trade Commission ruled that the franchisor is guilty of antitrust. Accordingly, the franchisor announced that it will compensate 15% of the disposal loss incurred by any of its franchisees. Although it figures are unfounded and, if it is inappropriateness, more conflict is expected to happen with franchisee. In this study, we used simulation to inspection the appropriate disposal loss compensation policy for both franchisor and franchisee, to avoid management risks in convenience stores.
