Sarku Japan prepares for ambitious domestic and international growth

Aug. 19, 2010 | by Alicia Kelso

No need to dedicate an entire evening to hibachi-grill entertainment, or your entire week’s budget to a fancy sushi joint. If you’re craving Japanese cuisine, Sarku Japan is planning to grow its franchise base aggressively within the next couple of years, specifically in the quick-service segment.

Bruce Kim, director of franchise development for Sarku Japan, believes the company is positioned just right for such an expansion.

“This is a very powerful niche market that is vastly under served. In the past, customers were required to spend $20 to $40 per person for a quality Japanese meal. Now, they can enjoy a quality, freshly made meal, including sushi, for less than $10 per person without the tip,” he said.

The formula has worked so far. Sarku Japan first opened about 20 years ago and has more than 200 locations in 37 states. It also experienced 5 percent same-store sales growth in the past year. Two of many factors that prompted a vast growth plan.

A new franchise just opened in College Park, Md., four units are underway in the New York and New Jersey areas, and another is planned for Orland Park, Ill. And that’s just the beginning.

“We are in the midst of aggressive, but controlled, expansion plans,” Kim said. “Our strategy is not driven by a specific number of units as it is by quality, successful units. Opening 15 new street-level stores in 2011, including five in the Mid-Atlantic region, is a realistic target.”

Additionally, within the next 10 years, Sarku Japan forecasts 1,000 new units throughout the United States and is taking some of that momentum overseas.

In June, the company paired up with Frisby Corp. for a multi-year master license agreement to open 20 Sarku Japan Teriyaki and Sushi Express stand-alone restaurants in Colombia throughout the next 10 years.

In April, the company signed a multiunit agreement in Vietnam to open a dozen stores within the next three years. There are also tentative plans to open in the Middle East, Asia and Europe, as long as the “right partners” come along.

“The amount of unsolicited inquiries into global franchising has been very encouraging,” Kim said.

Another indication that Sarku Japan is poised for ambitious growth is its shift from mall food court settings to outdoor locations and stand-alone units.

“Expansion outside of the traditional food court setting is a natural progression for healthy restaurant chains. Chains that have successfully performed this transition include Panda Express and Chick-fil-A,” Kim said. “In mall food courts, we are dependent on the mall to generate suitable traffic. We are now targeting busy trade areas where our customers live. In essence, we’re developing locations in outdoor food courts in busy shopping centers.” 

Kim added that the company is also exploring locations with drive-thru components, but the current set up is idealistic for Sarku Japan customers who “enjoy watching their food being freshly made.”

That includes items made on a Teppanyaki grill, such as teriyaki chicken over rice, and Sarku Japan’s made-to-order sushi. Kim is confident these types of dishes, and the restaurant’s price points, will translate into a successful expansion, both in units and customers.

“Diners are tired of the same old burgers, pizzas and sandwiches,” he said. “They are looking for healthier, tastier alternatives,” Kim said. “After many years of being considered expensive and gourmet, teriyaki and sushi are now very mainstream.”

Topics: Asian/Chinese , Business Strategy and Profitability , Franchising & Growth , International

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.
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