As much as Jun Nagao doesn¡¯t like the idea of foreign businesses scooping up Japanese companies, the former 7-Eleven franchise owner thinks a takeover would bring welcome change to the retail giant where he spent decades.

Nagao, who until last year owned a 7-Eleven convenience store in Gunma Prefecture, says years of strategic missteps left parent Seven & I Holdings ripe for a $38.5 billion bid from Canada¡¯s Alimentation Couche-Tard.

He is not alone in his criticism. Of nine current 7-Eleven franchisees in Japan who were interviewed, almost all voiced disapproval of Seven & I¡¯s strategy and welcomed the proposed buyout by Circle K owner Couche-Tard.

While Seven & I has rejected the bid, Couche-Tard has said it remains interested. The deal would be the biggest-ever foreign acquisition of a Japanese company and would boost the Canadian retailer¡¯s economies of scale.

The franchisees were almost unanimous in some of their complaints, including about the high-profile failure of a cashless payment system, 7pay. Many voiced concern about competition from rivals and said they struggled with rising costs as Japan exits deflation for the first time in decades.

¡°As a Japanese, I don¡¯t think having companies bought out by foreign firms is good in principle,¡± said Nagao, who battled with headquarters for years until he agreed to part ways with the company. He was among a group of owners who lost a 2013 court fight to shorten mandatory 24-hour business hours because of tight staffing.

¡°The current management failed to create value ... otherwise, this sort of thing wouldn¡¯t have happened.¡±

Seven & I has been a market laggard. In the five years to mid-August, just before the bid was unveiled, its shares rose 60% including dividends, while the benchmark 225-issue Nikkei stock average more than doubled.

Japan and the U.S. account for around two-fifths of the 85,000 7-Eleven stores worldwide. The Japan business is smaller by sales, but highly profitable, with operating margins of 27% versus an average of 3.5% outside the country.

In Japan, 7-Eleven¡¯s average daily sales per store exceed those of main competitors Lawson and FamilyMart, although sales at both rivals are growing.

Owners are key to Seven & I¡¯s lucrative domestic convenience store business and some are also shareholders. Some of the owners¡¯ comments show concerns previously raised by U.S. activist fund ValueAct Capital and other investors about 7pay and the need for a governance overhaul are shared by other stakeholders.

To be sure, the interviewed owners are not a comprehensive sample of the more than 21,000 franchised stores in Japan. Seven & I does not disclose the number of owners, and almost all of those who spoke declined to be identified in order...