ATLANTA Nearly 30 years after opening its first restaurant in Japan, Wendy’s will halt development in that key Asian market, closing all 71 units there Dec. 31.
Atlanta-based Wendy’s/Arby’s Group said Friday that its international division would not renew its franchise agreement with Japanese operator Nihon Wendies. Wendy’s/Arby’s said it was unable to agree to new terms for more development with Zensho Co. Ltd., the company that controls Nihon Wendies.
“Japan is an important market, and we intend to pursue new development opportunities in the country with new franchisees or joint-venture partners,” said Andy Skehan, senior vice president of Wendy’s/Arby’s International. “We believe there is significant long-term potential for Wendy’s/Arby’s Group restaurants in Japan.”
Wendy’s opened its first restaurant in Japan in 1980, and its locations in the country were in and around Tokyo. Daiei Inc. had managed the brand’s units until Zensho took over operations in 2002.
According to a report by the Associated Press, Wendy’s Japan restaurants had sales of 6.2 billion yen, or $70 million, in the fiscal year ended March 2009. That same report pegged the number of units of competitor McDonald’s to 3,720 locations in Japan. Burger King reportedly has 16 restaurants in Japan, having re-entered the market in 2007.
Wendy’s/Arby’s International’s Skehan added, “We remain focused on building our international business with franchisees that are fully committed to reinvestment, growth and our high restaurant operations standards.”
Back in early October, when Skehan was hired by Wendy’s/Arby’s Group after serving as president for the Europe, Africa and Middle East division for Quiznos, chief executive Roland Smith estimated that Wendy’s/Arby’s Group had the potential to build more than 8,000 restaurants outside North America.
One large development deal was announced last June, when Wendy’s/Arby’s inked a 135-unit development deal with Saudi Arabia-based Al Jammaz Group. That deal, to be carried out in nine Middle Eastern and North African countries over the next 10 years, was the first development pact calling for dual-branded Wendy’s and Arby’s units. No such co-branded locations are planned for this time in the United States.
Wendy’s/Arby’s entire system includes more than 10,000 restaurants.
Contact Mark Brandau at [email protected].
