Business Intelligence on Retailing, Franchising, and Consumerism in China

Lessees At Lotus Xiaoshan Store Ask For Compensation

Chia Tai Group's Lotus Supermarket has postponed the opening of its Xiaoshan store many times. As a result, the lessees that had signed contracts with Lotus now are suing for compensation and return of their deposit.

Lotus Xiaoshan store was planning to open at the beginning of April 2006, but it has been postponed for some unknown reasons.

Zhang Mijun, a lessee representative, says that he had signed a unilateral contract with the investment staff of Lotus and leased an area of 83 sqm to open a beauty parlor. He had paid a deposit for two months' rent, but Lotus had removed the equipment and shelves and postponed the opening date for an unfixed period. Zhang has contacted the investment department of Shanghai Lotus and asked for a return of deposit and a compensation for his loss. However, he was told that the deposit can be returned and the compensation is not available.

The investment department of Shanghai Lotus told Zhang Mijun that he and other lessees can lease the shops at other Lotus Supermarkets at a favorable price as a compensation for the loss caused by the delay of the Xiaoshan store.

Zhang said that he may consider accepting this solution but he still maintains the right to sue Lotus.

Belonging to Chia Tai Group, Lotus entered China in 1997 and currently has had over 70 stores in China.

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