Japan’s franchise market is said to be the second largest in the world after the United States, the world’s largest franchise market.

How did Japanese franchises, which began in the 1960s, grow to become the world’s second largest franchise market?

As shown in the statistical survey below, there are currently about 1,300 brands in Japan, with an estimated market size of approximately 26 trillion yen.

Even during the past 20 years, the number of brands and the market size have expanded to +300 and +1 trillion yen, respectively.

Of these, service franchises other than retail and food and beverage are expanding the most.

Major Events by Age

1960s Duskin cleaning service, Fujiya Restaurant started franchising.
1970s KFC, McDonalds, 7-Eleven Mr.Donuts etc landed in Japan.
1980s Large retail chains such as TSUTAYA and Autobacs, with major companies and others entering the franchise market.
1990s Franchising had penetrated small and medium-sized businesses and the market size had expanded rapidly.
2000s The collapse of Lehman Brothers created an urgent need to launch new businesses from many industries entered the market in rapid succession.
2010s The Great East Japan Earthquake had led to more multi-franchisees entering low-investment service franchises or people starting their own businesses and choosing to franchise.
2020s And now…

Why Japanese Franchises Have Grown

First of all, strict franchise laws do not exist in Japan. Since there is no registration or licensing system, ideas can be quickly introduced into the franchise system.

This results in a large number of similar competing brands, which tend to engage in friendly competition and constantly improve in order to survive.

The absence of strict franchise laws is very attractive to foreign franchisors.

Second, the franchisor can provide quality products/services regardless of the size of the company. That is because the franchisors strive to satisfy the Japanese customers.

And finally, while not a reason for growth, the current trend toward a weaker yen should be a major reason for the choice of Japanese franchises.

Statistical Survey by Japan Franchise Association (JFA)

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