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Wendy’s leaves Japan as franchise deal ends

Bloomberg News / January 2, 2010

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TOKYO - Wendy’s closed its doors in Japan after almost 30 years as queues spilled onto the sidewalk at some of the hamburger chain’s 71 restaurants.

Wendy’s/Arby’s Group, the third-largest US fast-food restaurant company, was unable to renew a franchise agreement with Tokyo-based Zensho Co. The Atlanta company hasn’t ruled out reentering the world’s second-largest economy if it finds a suitable new partner.

Sales at fast-food restaurants grew 3.1 percent in Japan last year, bucking the 0.8 percent drop in the overall dining industry, according to market researcher Fuji Keizai Co. Consumers, facing bleaker job prospects and falling wages, are seeking budget options, spurring sales for the local chains of McDonald’s and KFC.

Zensho said it decided not to renew the Wendy’s contract to concentrate on its other chains, which include the Sukiya beef-bowl brand.

Wendy’s had sales of $67 million for the year ended March 31 in Japan.