Ministop closing up shop in Indonesia for now
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Japanese convenience store operator Ministop is pulling out of the Indonesian market, at least for the time being.
The company announced Friday that it is terminating a franchise agreement with local retailer Bahagia Niaga Lestari, which wants to concentrate resources in other areas.
The retailer is Ministop’s sole franchisee in Indonesia. So when the six franchise stores it operates there are closed, the country will have no Ministops.
Ministop said it will search for a new partner and plan a return to Indonesia, since the convenience store market there has growth potential.
Ministop had inked the franchise agreement with Bahagia Niaga Lestari in 2012 because Indonesia bars foreign companies from investing in retail stores with less than 400 sq. meters of floor space. The first Ministop in that country opened in June 2013.
Questions & Answers
Q.Why is Ministop pulling out of the Indonesian market?
Why is Ministop pulling out of the Indonesian market?
Ministop is terminating its franchise agreement with local retailer Bahagia Niaga Lestari. The retailer wishes to concentrate its resources in other areas, leading to the closure of all six existing stores.
Q.Will Ministop return to Indonesia in the future?
Will Ministop return to Indonesia in the future?
Yes, Ministop intends to search for a new partner and plans a return to Indonesia. The company views the convenience store market there as having growth potential.
Q.Why did Ministop enter the Indonesian market via a franchise agreement?
Why did Ministop enter the Indonesian market via a franchise agreement?
Indonesia bars foreign companies from directly investing in retail stores under 400 square metres. A franchise agreement was necessary to navigate these regulations when Ministop first entered the market.