FamilyMart in China: The Divorce of a 20-Year International Partnership?

A dramatic dispute between two partners was about to push their long-time, successful international alliance to the verge of collapse. FamilyMart Co. Ltd. (FamilyMart) Japan and Taipei-based Ting Hsin International Group (Ting Hsin) had collaborated through a brand licensing arrangement to develop and operate FamilyMart convenience stores in mainland China for nearly 20 years. With FamilyMart stores topping the ranking of foreign convenience store brands, the collaboration appeared quite successful. However, on May 15, 2019, breaking news swept through the business media announcing that FamilyMart Japan had sued Ting Hsin in court and requested a compulsory dissolution of their partnership. A fierce feud between the two partners ensued, and an uncertain fate was closing in on the co-operation. With their 20-year brand licensing arrangement coming to an end in just a few months, both partners had to contemplate whether to extend the partnership and, if so, how to renegotiate the terms.

This case is suitable for undergraduate- and graduate-level courses that touch on topics related to international alliances. Depending on the angle of analysis, it can be used in courses on strategic management, international business, global strategy, strategic alliances, and international entrepreneurship. It provides details on a series of significant issues that bear on the formation, management, and termination of international alliances. The case aims to help students gain conceptual knowledge of and practical skills related to the entire life cycle of international alliances. Through analyzing the case issues and answering the assignment questions, students will be able to do the following:<ul><li>Understand the motives behind the formation of international alliances, particularly when involving foreign market entry.</li><li>Identify partner selection criteria in international alliances.</li><li>Analyze the governance structure of international alliances.</li><li>Explore the underlying causes of instability in international alliances.</li><li>Grasp the concept of bargaining power and dynamics in inter-firm collaboration.</li></ul>

• International alliances
• Joint venture
• Franchising
• Termination