Thread by The Wolf of Franchises 🍟
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- May 8, 2022
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In 1970, a businessman bought the rights to bring McDonald's to Japan.
But when CEO Ray Kroc arrived 3 days before the 1st store was set to open, he was SHOCKED.
Construction hadn't even begun!
Here's how Den Fujita built a McDonald's in 36 hours (& grew an empire in Japan)🧵
But when CEO Ray Kroc arrived 3 days before the 1st store was set to open, he was SHOCKED.
Construction hadn't even begun!
Here's how Den Fujita built a McDonald's in 36 hours (& grew an empire in Japan)🧵
Den Fujita was born in 1926 in Osaka, Japan.
The city got decimated during World War II, and took the live of Fujita's father and 2 sisters.
Despite this, he still went on to attend law school at the University of Tokyo, one of the country's most prestigious universities.
The city got decimated during World War II, and took the live of Fujita's father and 2 sisters.
Despite this, he still went on to attend law school at the University of Tokyo, one of the country's most prestigious universities.
While in law school, Fujita started a side-hustle to help pay tuition - he'd import foreign goods, then sell them to Japanese retailers.
This eventually turned into a full-fledged business, so he decided to forego a career in law to run it full time in 1951.
This eventually turned into a full-fledged business, so he decided to forego a career in law to run it full time in 1951.
Fujita specialized in high-end fashion brands, and became the leading importer & wholesaler of clothing from brands like Christian Dior and Longchamp.
The client network he built among Japan’s retail department stores would be an invaluable asset later on...
The client network he built among Japan’s retail department stores would be an invaluable asset later on...
Fast-forward to 1970 - Fujita's business was growing.
Via travels to the US, he had eaten at a McDonald's as early as 1967.
After hearing from a colleague they were expanding internationally, Fujita arranged a meeting with Ray Kroc immediately.
Via travels to the US, he had eaten at a McDonald's as early as 1967.
After hearing from a colleague they were expanding internationally, Fujita arranged a meeting with Ray Kroc immediately.
Kroc was won over by Fujita's experience with global brands and familiarity with Japanese consumer tastes.
"I told Kroc I was only interested if it was a 50-50 joint venture, with a Japanese president"
Kroc replied his only condition was that they succeed.
"So, we went ahead"
"I told Kroc I was only interested if it was a 50-50 joint venture, with a Japanese president"
Kroc replied his only condition was that they succeed.
"So, we went ahead"
With no blueprint for international success, Fujita had to invent the playbook for Japan.
Two strategic decisions were largely responsible for his future success with McDonald's in Japan 👇👇
Two strategic decisions were largely responsible for his future success with McDonald's in Japan 👇👇
1. CULTURAL
Fujita concluded the company had to look 100% Japanese.
This wasn't a luxury fashion brand that high-end consumers were longing for, so he positioned McDonald's as if it was an authentic Japanese brand.
Fujita concluded the company had to look 100% Japanese.
This wasn't a luxury fashion brand that high-end consumers were longing for, so he positioned McDonald's as if it was an authentic Japanese brand.
He changed the English names to make them easier to pronounce.
"McDonald's" became "Makudonarudo", and Ronald McDonald became Donald McDonald.
Fujita also altered the menu to incorporate local favorites.
"McDonald's" became "Makudonarudo", and Ronald McDonald became Donald McDonald.
Fujita also altered the menu to incorporate local favorites.
2. REAL ESTATE
The go-to strategy for McDonald's was to build stores in the suburbs, and cater to the drive-in eating habits of America.
But Fujita believed the younger generation was his key to success, which meant he focused on urban markets first.
The go-to strategy for McDonald's was to build stores in the suburbs, and cater to the drive-in eating habits of America.
But Fujita believed the younger generation was his key to success, which meant he focused on urban markets first.
"The eating habits of older Japanese are conservative. But we could teach the children the hamburger was something good."
So Fujita chose Tokyo's shopping district for the 1st location, & was able to secure prime real estate thanks to the network he built running Fujita & Co.
So Fujita chose Tokyo's shopping district for the 1st location, & was able to secure prime real estate thanks to the network he built running Fujita & Co.
"American tourists eating hamburgers in Tokyo would be an eye catcher, Japanese seeing that would think, 'Americans are eating it; it must be good."
But Fujita's real estate was inside Mitsukoshi, Japan's largest department store.
The prime real estate came with a condition...
But Fujita's real estate was inside Mitsukoshi, Japan's largest department store.
The prime real estate came with a condition...
Fujita's construction couldn't interfere with Mitsukoshi's regular business hours - they gave him a 39-hour window on a holiday to build the entire restaurant.
Rather than complain, he rented a warehouse & hired a crew of engineers to practice the process from start to finish.
Rather than complain, he rented a warehouse & hired a crew of engineers to practice the process from start to finish.
After 3 trials, they figured out how to get the construction time down to just 36 hours.
With Ray Kroc and the entire McDonald's executive team quite literally watching, Fujita and his team executed.
And on July 20th, 1971, the first McDonald's opened in Japan.
With Ray Kroc and the entire McDonald's executive team quite literally watching, Fujita and his team executed.
And on July 20th, 1971, the first McDonald's opened in Japan.
Despite no advertising, the restaurant was an immediate hit, and within a few months it set the record for most sales in a day.
Fred Turner, eventual McDonald's CEO said:
"Japan was really the acid test. After that we realized that the American menu could fly abroad."
Fred Turner, eventual McDonald's CEO said:
"Japan was really the acid test. After that we realized that the American menu could fly abroad."
With proof of concept behind him, Fujita expanded and executed at breakneck speed.
From 1971 until 1999, he opened 3,000 locations – about two openings per week for 28 years straight 🚀 📈
Today, Japan is the 3rd largest market for McDonald's, behind only China and the US.
From 1971 until 1999, he opened 3,000 locations – about two openings per week for 28 years straight 🚀 📈
Today, Japan is the 3rd largest market for McDonald's, behind only China and the US.
Looking back, Fujita proudly told an anecdote that demonstrated the success of his approach.
A group of Japanese boy-scouts visited the US and were interviewed by a local TV station. 1 of the boys said:
"I didn't know they had McDonald's in the USA, too."
🎤 💧
A group of Japanese boy-scouts visited the US and were interviewed by a local TV station. 1 of the boys said:
"I didn't know they had McDonald's in the USA, too."
🎤 💧
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Give me @franchisewolf a follow to catch them in your feed.
And if you enjoyed this story, feel free to like & retweet it to share with others!
You may also like my 2x/week newsletter that breaks down new franchises:
workweek.com/discover-newsletters/the-wolf-of-franchises/
workweek.com/discover-newsletters/the-wolf-of-franchises/
Special shoutout to @NeckarValue who wrote an amazing Substack article that provided a lot of the inspiration for this.
He's a great follow and consistently puts out interesting long-form reads.
You can read the full-story here:
neckar.substack.com/p/a-big-mac-fortune-how-den-fujita?s=r
He's a great follow and consistently puts out interesting long-form reads.
You can read the full-story here:
neckar.substack.com/p/a-big-mac-fortune-how-den-fujita?s=r
Other Sources:
www.youtube.com/watch?v=fEU5H5cNQME
skdesu.com/en/mcdonald-in-japan/
en.wikipedia.org/wiki/Den_Fujita
www.youtube.com/watch?v=fEU5H5cNQME
skdesu.com/en/mcdonald-in-japan/
en.wikipedia.org/wiki/Den_Fujita
TL;DR
✅ Kroc chose Fujita due to his experience
✅ Fujita changed the real estate strategy in Japan
✅ McDonald's Japan was made to feel more authentic
✅ Fujita built the store in 36-hours with Kroc watching over his back
✅ Kroc chose Fujita due to his experience
✅ Fujita changed the real estate strategy in Japan
✅ McDonald's Japan was made to feel more authentic
✅ Fujita built the store in 36-hours with Kroc watching over his back
P.S.
Here's a cool video of Masayoshi Son, the founder of SoftBank, describing how he looked up to Fujita and flew to his office unannounced as a 16 year old:
Here's a cool video of Masayoshi Son, the founder of SoftBank, describing how he looked up to Fujita and flew to his office unannounced as a 16 year old:
Bonus: Japanese McDonald's still serve menu items that you can't get anywhere else.
1 example is the Full Moon Cheese Tsukimi Burger - it contains a beef patty + egg patty to represent the full moon.
It's only served during their harvest moon festival known as Tsukimi 🌗 🇯🇵
1 example is the Full Moon Cheese Tsukimi Burger - it contains a beef patty + egg patty to represent the full moon.
It's only served during their harvest moon festival known as Tsukimi 🌗 🇯🇵
Last one - this quote from Den Fujita sums up his work ethic in my mind:
"Success is given equally to all, if you work at it for 24 hours a day as I do."
Thanks to everyone who's engaged with this thread, been spending time with family today but I will respond tomorrow!
"Success is given equally to all, if you work at it for 24 hours a day as I do."
Thanks to everyone who's engaged with this thread, been spending time with family today but I will respond tomorrow!
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Trung Phan @TrungTPhan
·
May 8, 2022
Fantastic thread again, Wolf!