KFC in Japan

History

KFC Japan was originally formed as a joint venture between its American parent KFC and Japan's Mitsubishi Corporation. Following four years of negotiations, Mitsubishi was awarded the franchise rights to KFC in Japan, and a test store was opened at the Osaka World Expo in March 1970.

After its successful debut, the first proper store was opened in the suburban location of Nagoya in November 1970. KFC wanted suburban locations, whereas Mitsubishi argued for city center locations, as cars had not been widely adopted in Japan at that time. Though two more locations were opened in suburban Osaka, the stores struggled, and after less than a year of operation, had lost JP¥ 100 million. As a result of this failure, Mitsubishi's original plan for urban locations was pursued.

The first outlet under the new approach opened in 1972 in Kobe, an upmarket residential area with a large Western expatriate community. The strategy was a success, and by December 1973, 100 outlets had been opened.

Harland Sanders himself visited the Japanese operations in 1972, 1978 and 1980. In 1983 there were 390 outlets with annual sales just under $300 million. By this time Japan was KFC's largest single foreign market.

In August 1990, KFC Japan was listed on the Tokyo Stock Exchange. KFC benefited from the economic boom in Japan during the 1980s, and grew to 1,000 outlets with annual sales of $1.2 billion by 1993. However, the rapid expansion of outlets saw franchisees competing for market shares with each other, and around 100 outlets closed down in the mid-1990s.