Wendy's Looking to Japan Again

July 5/Columbus, Ohio/The Columbus Dispatch -- In hopes of increasing its international presence, Wendy's/Arby's Group has plans to re-enter the Japanese market it left only seven months ago.

"Japan is an important market for us, and we see significant long-term opportunities for growth there as well as throughout the Asia/Pacific region," said Bob Bertini, spokesman for Wendy's/Arby's Group.

Wendy's restaurants had operated in Japan for 30 years when Wendy's/Arby's Group decided late last year not to renew its franchise agreement.

"We ended our development agreement in December, because the franchiser was not meeting our expectations for development growth and reinvesting in the business," Bertini said.

As a result, its 70 restaurants in the country closed.

In the months since, Wendy's/Arby's Group has been devising its re-entry strategy, Bertini said. The chain is now looking for operating partners in Japan. The company is open to considering regional or countrywide development plans.

Bertini said it is anticipated that Wendy's restaurants would be co-branded and offer both chains' menus. Local cuisine also will be incorporated.

Joscelyn MacKay, analyst and credit specialist for Morningstar, said Wendy's/Arby's Group wants to open 35-45 units internationally this year. She said Japan represents a large piece of that.

"They have great potential for international growth," MacKay said. "Currently, it's their largest growth driver."

Although he said specific development projections cannot be released, Bertini said the chain is working toward a more significant presence in Japan than in the past. He is optimistic about consumer response, using online chatter since news of the re-entry plans as a precursor.

"Our goals for Japan are long-term in nature, and our pace of development will depend on many factors," he said. "We plan to open restaurants throughout Japan."

Wendy's/Arby's Group is far behind other major fast-food companies in international presence, with only 7.5% of its restaurants outside the United States. McDonald's has 57% of its outlets outside North America. Yum! Brands, whose chains include Taco Bell and Pizza Hut, is at 48%.

Wendy's/Arby's Group opened its first dual-branded restaurant in Dubai in May. Also in the works with a Turkish franchiser are plans to open 100 Arby's in the next 10 years.

Wendy's/Arby's Group has announced plans to eventually have 8,000 restaurants outside North America, MacKay said.

"International growth is an important strategic priority (of ours)," Bertini said. "We want to enter the (Japanese) market as soon as possible, but we want to do it the right way with a partner that shares our vision for growth."

From the July 6, 2010, Prepared Foods' Daily News
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