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All about Japan, the No. 2 franchise economy


The red circle in the center of the white background represents the sun. The flag is called Hinomaru, which means “circle of the sun.” The sun plays an important role in Japanese mythology and religion as it is said the emperor is a direct descendent of the sun goddess, Amaterasu.

English is a mandatory subject in Japanese grade schools, but don’t expect to do business without an interpreter since many Japanese can understand some slowly spoken English, but are not used to speaking it.

Location: An island chain between the North Pacific Ocean and Sea of Japan

Capital: Tokyo (which has more Michelin Guide stars than any other city, plus 70 percent of the economy is concentrated there)

Ethnicity: 98.5% Japanese

Language: Japanese

Written language: Japan uses three different forms of writing. Foreign names are written in katakana characters (kanji is used to represent blocks of meanings and hiragana expresses grammatical relationships.)

Spoken language: While most Japanese students study English starting at age 12, many of them learn to read it, not speak it. The goal is to pass an exam, not to communicate in English. Plan to use a trained bilingual negotiator for deals. Interpreters are for social situations and translators are used for written documents.

Religion: Shintoism 84%; Buddhism 71.4% (many people belong to both religions)

Population: 127 million

Population rank in world: 11th

Median age: 46.1 years

Urbanization: 91.3%

Nuclear families: 56%

One-person households: 32%

Government: Parliamentary democracy under a constitutional monarch

Chief of state: The Emperor

National Diet: The two branches of the legislature (yes, that’s the official term)

Political stability: Very stable with no fear of turmoil

Laws: There are no franchise laws, but business deals are protected by general commercial law and disclosure guidelines  

Trademark and patents: Well protected, which differs from other Asian countries

Import restrictions: Japan has very strict import guidelines concerning food colors and dairy products

Major cities: Tokyo (37 million); Osaka-Kobe (11 million); Nagoya (3.3 million)

Literacy rate: 99% (and 95% of the population have high school degrees)

GDP: $4.7 trillion

Ease of doing business: 29 out of 189 economies (down from its 2014 rank of 27)

Ease of getting credit: Ranked 71

Ease of getting electricity: Ranked 28

Getting around: Hiring a guide for first timers is suggested, as most signage is in Japanese and many buildings don’t have street numbers

Visa: Not needed for U.S. passport holders visiting for less than 90 days

Internet usage: 84% of the population

Time difference: 14 hours ahead of EST

Decision-making style: By consensus within their group; rely on feelings more so than facts.

Dates: Year, month, day (March 1, 2015 is 15.3.1) or day, month year: 1.3.15

Size of the franchise market: $198 billion, the second largest in the world

No. of franchises: 1,305

Percentage of franchises that are convenience stores: 41%

Approximate number of U.S. franchise brands there: 50-plus

Labor costs: $12 to $13 an hour for retail workers; plus other expenses such as insurance

Cuisine: Japanese like healthy food. They crave variety, but also familiarity. To accommodate this, franchisors blend their existing recipes with Japanese flavors to make them more familiar, according to consultants, Dai Corp. Popular savory tastes include soy sauce, consomme, seaweed and vinegar. Green tea and red bean are common flavors for ice cream.

Getting started: Don’t try to do your due diligence from a desk in the U.S. Visit the Japanese markets you plan to enter, get to know the people and the lay of the land first hand. Hiring a consultant who is knowledgeable of Japan culture, as well as business practices, is also advised.

Embarrassing, but useful to know: On average Americans are taller and wider than Japanese and therefore everything from showers to seats on public transportation may be a tight fit.

Sources: I. Fujita International, Japanese Embassy, franchisemeets.com; 2010 Census Report for Japan; Internet, CIA World Factbook;  “Kiss, Bow or Shake Hands,” a cultural business book


Franchisors, tackle the capital first. Conventional wisdom says that if you can make it in Tokyo, you can make it anywhere in Japan.



One  U.S. dollar equals 117.64 yen (pronounced  “en”). Yen is the third most traded currency on the foreign exchange market.

Doing Business

The Japanese dislike strong emotional outbursts in public, so bring your poker face to negotiations.

Younger members of your team should defer to their seniors during meetings. Their role will often be to socialize with their Japanese counterparts at night when the real scoop on how the process is proceeding will be conveyed to them, according to the authors of "Kiss, Bow or Shake Hands.”

The Japanese work week is generally 48  hours without overtime pay or comp time. It's spread out over five-and-a-half days, although that may be changing. However, working long hours is seen as a badge of honor.

Apologizing is common for business people. Be prepared to admit you’re sorry if you screw up.


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