No more beef: Wendy's burger chain leaves Japan
TOKYO (AP)--Wendy's burger chain severed its agreement with its sole franchise owner in Japan, temporarily leaving a market long dominated by McDonald's Corp.
Wendy's opted to end its deal with franchisee Zensho Co. Ltd., but hopes its absence from the booming Asian country, where it has done business for 29 years, is short-lived, Wendy's/Arby's Group Inc., spokesman Bob Bertini said Dec. 11.
"We think there's a significant opportunity for us in Japan,'' Bertini said. "We will be looking for new franchise partners or franchisees or joint venture partners.''
The 71 Japanese locations of America's No.3 hamburger chain--20 percent of its 350 overseas restaurants--will close by the end of December.
"We will focus our resources on beef bowl restaurants and others,'' said a Zensho spokesman who declined to be named, citing department policy. "The closure is part of our business plans.''
Losing the Japanese stores isn't expected to hurt Wendy's/Arby's finances, but it could deal a hit to the brand.
"It's a sizable pieces of the Wendy's business there,'' said Morningstar analyst R.J. Hottovy.
Wendy's Japan sales amounted to 6.2 billion yen ($70 million) in sales in its fiscal 2009. The restaurant opened its first shop in Japan in 1980 and was managed by retailer Daiei Inc., until 2002, when Zensho took over.
Dublin, Ohio-based Wendy's is part of the Atlanta-based Wendy's/Arby's Group Inc., which continues to eye a massive international expansion, aiming for 8,000 international restaurants between the two brands.
Wendy's and Arby's together operate about 10,000 restaurants around the globe, nearly all in the U.S. and Canada.
Japan's burger business has long been dominated by McDonald's, which is said to enjoy around a 65 percent market share.
McDonald's--the world's biggest hamburger chain--opened its first burger shop in Tokyo's glitzy Ginza district in 1971. Since then, the number of McDonald's shops in Japan has swelled to 3,720.
Burger King Corp.--the world's No. 2 hamburger chain--has 16 shops in Japan. Burger King withdrew from Japan in 2001, partly after losing a price war with McDonald's, but returned to the market in 2007.
Apart from the American burger giants, Japanese enjoy local burger chains, including Mos Burger, which sells rice burgers with fried shrimp. Mos Food Services Inc., said there are 1,334 Mos Burger chains in Japan.