Opening Hours and Closure Rules to Check Before Joining a Franchise in Japan

When joining a franchise, brand recognition is not the only consideration: you also need to be able to keep the business running sustainably. Opening hours set across a franchise network can become a burden if they do not suit local demand or recruitment conditions. Before joining, establish when the premises must be open and when you may close, separately from any requirement for you, as the owner, to work in the business.

1. Distinguish ‘standard opening hours’ from contractual obligations

First, check whether the opening hours shown in recruitment materials are simply an example or a requirement imposed on every franchisee. Terms such as ‘in principle’, ‘recommended’ or ‘specified by the franchisor’ do not, on their own, tell you how much discretion franchisees have to change them. Review not only the contract but also any schedules or operating manuals that set out opening hours.

Ask the franchisor the following specific questions:

• Are opening and closing times fixed, or can they be set for each outlet?
• Are regular closing days, closures over the New Year period and seasonal reductions in hours permitted?
• For an outlet within a shopping centre or other commercial complex, how are the venue’s opening-hour requirements reconciled with those of the franchisor?
• What hours apply immediately after launch, and what conditions govern the move to normal trading hours?
• If you cannot meet the required opening hours, what corrective procedures or contractual measures apply?

Do not base your decision solely on an assurance that ‘all our other outlets operate under the same conditions’. Customer visiting patterns differ between station-front locations and residential neighbourhoods. Obtain an answer specific to your proposed outlet on whether hours suited to its location will be permitted.

The time the premises close to customers is also different from the time work actually finishes. If cleaning, closing procedures, preparation or deliveries require work outside opening hours, include that time in your operating plan. Basing staffing solely on customer-facing opening hours could lead you to underestimate the working hours needed.

2. Assess the burden of extended hours by time of day

Longer opening hours do not necessarily mean higher profits. When assessing a franchise opportunity, examine the additional burden of trading during periods such as early mornings or late nights, separately from the outlet’s overall monthly income and expenditure. The aim here is not to rebuild the entire sales forecast, but to test whether you can sustain the required opening hours.

If you ask the franchisor for reference data broken down by time of day, check the location, outlet format, number of trading days and period covered. Do not assume that results from outlets operating under different conditions will apply directly to yours. If the data is unavailable, factor that uncertainty into a cautious assessment.

The costs extend beyond additional staffing. Identify the extra spending associated with longer hours, including lighting, heating and cooling, security measures, cleaning and additional preparation. Where applicable, include statutory premium pay for late-night work and other qualifying work in your labour costs.

Compare the profit generated during those hours after deducting the cost of goods and sales-linked payments—not simply the sales revenue—with the additional cost of staying open. Remember, however, that fixed costs such as rent will usually remain even if you reduce your opening hours. Do not assume that all costs will fall in proportion to trading hours.

There are also limits to the assumption that ‘the owner will cover any shifts we cannot recruit for’. Check whether persistent staff shortages allow you to discuss reduced hours, obtain temporary staffing support or access recruitment assistance, and establish the conditions and costs involved.

3. Check the application procedures for reduced hours and temporary closures

Even hours that seem manageable when you sign the contract may become difficult to maintain because of recruitment problems, illness or transport disruption. What matters is not just whether changes are possible, but whether there is a clear process from the initial discussion through to a decision.

For routine changes to opening hours, check whom to apply to, what documents are required, the application deadline, the decision criteria and the expected response time. A verbal assurance that ‘we are happy to discuss it’ is not necessarily a commitment to approve a change. Ask whether reasons will be given if an application is refused and whether alternatives can be discussed.

For example, you could ask whether you may trial an earlier closing time for a set period while monitoring sales and the impact on customers. As well as checking whether a trial is possible, establish who will decide the hours afterwards and on what basis. This will give you a clearer picture of how discussions would proceed.

Treat temporary closures separately from routine applications to change opening hours. Check:

• The notification procedure when you cannot wait for prior approval, such as during a disaster or sudden illness.
• What to do if the franchisor’s contact person cannot be reached at night or on a non-working day.
• Who is responsible for public notices, contacting customers with bookings and suspending orders.
• What checks are required before reopening, and which payments to the franchisor continue during the closure.

Make a clear distinction between situations requiring prior approval and those allowing notification afterwards, so that decisions are not delayed when safety is at stake. At the same time, closing temporarily does not necessarily suspend royalties or other payments automatically. Check whether minimum or fixed charges remain payable, and plan for cash needs during the closure.

4. Do not confuse legal protection with a contractual right to change hours

Japan does not have a blanket system giving every franchisee an unrestricted right to reduce opening hours or close temporarily. The franchisor and franchisee are independent businesses, so the starting point is to check the contract for opening-hour obligations and procedures for changing them.

Article 11 of Japan’s Act on the Promotion of Small and Medium-sized Retail Business requires franchisors whose operations qualify as a ‘specified chain business’ under the Act to provide prospective franchisees with written disclosures and explanations before they enter into a contract. Coverage depends on statutory criteria; the Act does not automatically apply to every business described as a franchise. If opening hours are an important operating condition, ask for a specific explanation of the obligations and exceptions, whether or not they appear in the disclosure document.

The Japan Fair Trade Commission’s guidelines on franchise systems under the Antimonopoly Act also apply to a broad range of franchise dealings, not just retail and food service. A franchisor’s use of a superior bargaining position to impose an unjust disadvantage on a franchisee may raise concerns about abuse of a superior bargaining position.

However, specifying opening hours is not automatically unlawful, nor does poor profitability automatically entitle a franchisee to change them. Legality is assessed in light of the individual circumstances. If you have concerns, gather the reasons given for the required hours, records of discussions and evidence of the burden involved, and consult a qualified professional.

The practical step before joining is to bring normal opening hours, change procedures and emergency closure arrangements together in a single checklist. Leave no questions unanswered for your proposed outlet, and ensure any agreed exceptions are reflected in the contract or special terms before deciding whether to proceed.