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No. 359, August 1999

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American Companies in Japan


It took six months, but OUTBACK STEAKHOUSE INC. has found a partner to help it move into the Japanese market (see Japan-U.S. Business Report No. 353, February 1999, p. 19). The Tampa, Florida restaurant chain has signed an agreement with WDI SYSTEMS INC., which already has such American restaurant brand names as Hard Rock Cafe and Tony Roma's in its portfolio, to form a company to franchise as many as 200 Outback locations in time.

Fresh-baked cinnamon rolls could be available in central Tokyo by yearend and eventually at other stores in central Japan. Seattle's CINNABON, INC. licensed SUGAKICO SYSTEMS CO., LTD. of Nagoya to build 60 Cinnabon bakeries/cafes over the next five years, mostly in the Tokyo metropolitan area. The typical Cinnabon location is expected to be about 860 square feet and to have seating for 60 customers as well as on-site baking equipment. Sugakico Systems, which operates some 330 fast-food restaurants, expects each Cinnabon bakery to generate annual revenues of $666,700. Large cinnamon rolls will cost about $2.90 each, while smaller ones will be about $2.10. Since October 1998, Cinnabon has been owned by Atlanta-based AFC ENTERPRISES, INC.

SEATTLE'S BEST COFFEE, INC., another member of AFC ENTERPRISES, INC.'s brand portfolio, also has aggressive plans for Japan. It signed an agreement with NIPPON BRUNSWICK CO., LTD., a joint venture of Lake Forest, Illinois-based BRUNSWICK CORP. and MITSUI & CO., LTD., to develop 100 SBC espresso cafes in Tokyo as well as in Kanagawa, Ibaraki, Chiba, Gunma, Tochigi and Saitama prefectures. At the same time, Seattle's Best Coffee gave Osaka's MIFUNE CORP. exclusive rights to franchise 67 cafes, kiosks and coffee carts in Osaka, Kyoto, Wakayama, Hyogo, Fukuoka and Okinawa prefectures. The prototype SBC cafe for Japan is 1,300 square feet with seating for 50 customers. Sales are projected at $83,300 a month. Seattle's Best Coffee is a relative latecomer to Japan. Hometown rivals STARBUCKS COFFEE CO. and TULLY'S COFFEE CORP. already have stores open.

An exchange rate of ¥120=$1.00 was used in this report.aaaaaa

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