We speak with the executive director of the Japan Franchise Association (JFA), about the country’s rich history – and future – of franchising.
GF: Could you summarize the work that JFA conducts?
HI: JFA has been established since 1972, to encourage the sound development of franchising in Japan. Our activities include improving the legal environment for franchising, providing advice services, developing industry organization, developing plans for PR, and addressing environmental issues.
GF: How receptive is Japan to franchising?
HI: Both national and international franchising is reputable in Japan. McDonald’s performs with the highest success, as does KFC, because of its high-quality food and consecutive advertising push.
Convenience store franchises in Japan also originate from overseas. 7-Eleven Japan is a Japanese subsidiary that began as an American brand but has grown in Japan. We welcomed international brands because of our yearning for Western culture.
International brands franchising in Japan have expanded the range of Japanese franchising, too. Many Japanese brands such as MOS Burger and FamilyMart developed their know-how by imitating the big foreign brands. Then, many years of assiduous effort brought them unique systems, and the good results they have today.
In terms of the service industry, I’d like to mention Curves especially. Curves has achieved great success in Japan, as its methods are closely developed and customers have absolute trust in it. Those kinds of brands do well in our country.
“Both national and international franchising is reputable in Japan”
GF: Are any adaptations needed to bring a concept into the country?
HI: Every entity is free to do business in Japan. However, goods and services undergo the rigorous selection of Japanese consumers, which I think are the most rigorous in the world. Trends move fast, and a company that attempts to survive in the Japanese market must pursue the current favorites of consumers. Japanese customers also tend to check the safety and security of manufactured commodities.
GF: Is etiquette a crucial part of the Japanese business landscape?
HI: What I would stress is punctuality. This is, of course, a basic business manner all over the world; in Japan, though, punctuality is indispensable. The Japanese don’t like ‘being late’ or ‘missing deadline’. A person who cannot control time won’t be able to win trust.
GF: What does the future of Japanese franchising look like?
HI: In the short term, an aging population requires goods and services which give consideration to the elderly. Concretely, narrowing is the key for the aged, whose scope of activity is restricted. A mass marketing strategy is outdated. In the long term, depopulation is another issue. This causes a labor shortage, and the Japanese economy will be influenced by the acceptance of foreign workers. Franchising will maintain growth, even in that situation, because it is a win-win business development model. It will also be important for national brands to shift focus from Japan to overseas, as the Japanese market shrinks.