The Wendy's Co.
(
WEN
) recently announced the opening of its first restaurant in Tokyo,
Japan. The new restaurant has come up in the Omotesando area in
Tokyo and is a part of Wendy's collaboration deal with Higa
Industries Co. Ltd. Earlier, in March this year, the company
entered into a development agreement with Higa Industries Co. Ltd.
to open approximately 100 Wendy's units in Japan. Per the deal,
Higa Industries will develop and operate Wendy's restaurants across
the country in the coming years.
The Japanese deal estimates the long-term market potential to be
about 700 restaurants. Wendy's Japan will specifically focus on
locally relevant menu, including the Avocado Wasabi hamburger and
the Truffle and Porcini Grilled Chicken sandwich.
Higa Industries, led by Ernest Higa, boasts superior local
market knowledge and has a proven track record of venturing into
industries as diverse as lumber, medical and restaurant, within the
Japanese market.
The latest restaurant opening in association with Higa
Industries marks Wendy's return to the Japanese market after it
discontinued its franchise agreement in the country back in 2009.
Wendy's had decided against renewing its contract, citing the
franchiser's tardy development. This resulted in the closure of 71
restaurants in that country.
The recent deal with Higa affirms management's intention of
making Japan one of the prime markets for international expansion,
considering its recovering economy and status of being the second
largest quick-service restaurant market in the world. The company
seeks to fully capitalize on the country's potential.
Japan has emerged as one of the prime targets for several other
restaurant companies.
Krispy Kreme Doughnuts Inc.
(
KKD
) also entered into a development agreement with its Japanese
franchisee, Krispy Kreme Doughnut Japan Co. Ltd., to set up and
operate 73 new restaurants in Japan within the next five years.
Another peer
McDonald's Inc
. (
MCD
) with a much wider scale of operation enjoys a prominent presence
in Japan.
In an attempt to strengthen its international presence,
Atlanta-based Wendy's consistently enters into long-term
development agreements with franchisees in the Middle East and
North Africa, Singapore, Turkey, Russia, Argentina, the Philippines
and the Eastern Caribbean. Additionally, the company is exploring
growth opportunities in China, Brazil and other key international
markets.
Wendy's currently retains a Zacks #2 Rank, which translates into
a short-term 'Buy' rating. We also maintain our long-term "Neutral"
recommendation on the stock.
KRISPY KREME (
KKD
): Free Stock Analysis Report
MCDONALDS CORP (
MCD
): Free Stock Analysis Report
WENDYS CO/THE (
WEN
): Free Stock Analysis Report
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