(Yicai) March 7 -- FamilyMart and its Chinese partner of 20 years, Ting Hsin International Group, have decided to put aside their differences and move forward with a new strategy to extend the footprint of the Japanese convenience store chain on the Chinese mainland, FamilyMart’s Shanghai branch said today.

The two partners, who went to court in 2019 due to a disagreement over the payment of brand royalties, will set up a new joint venture to run operations in East China, while Taiwan-based Ting Hsin will run FamilyMart stores in other parts of the country, Nikkei reported earlier this week. Tokyo-based FamilyMart remains the brand owner.

The aim of the agreement is to allow the two companies to continue to work together and to actively expand FamilyMart’s business on the mainland, the Shanghai branch said today without going into further detail. There will be no changes in management, it added.

Most FamilyMart stores on the mainland are franchise stores, so it is important to keep the FamilyMart brand, otherwise it will upset the franchisees, an industry insider said. It is understandable that the Japanese company wants to manage the business in East China, where the majority of FamilyMart stores are located.

The number of FamilyMart stores on the mainland climbed 15.4 percent in 2021 from 2019 to 2,967 outlets, but slumped by 236 in 2022, according to data from the China Chain Store and Franchise Association. Almost half of FamilyMart’s 3,000 stores on the mainland are in Shanghai, at 1,400 outlets.

FamilyMart linked arms with Ting Hsin in 2000 to introduce the convenience store chain on the mainland. The two set up FamilyMart China, with Ting Hsin as the majority shareholder with a 59.65 percent stake.

Editor: Kim Taylor