A Tale of Two Chains: US Franchises Prepare to Set up Shop in Tokyo

shake-shack-tokyo

On the surface, Taco Bell and Shake Shack appear to have nothing in common.

The former is a popular, long running purveyor of Tex-Mex food that has been mired by recent scandals about its ingredients. The latter is a gourmet hamburger outlet that attained listing on the NYSE for the first time this year, and touts the freshness of its menu’s items. Yet both chains are surprisingly linked by their recent plans to set up shop in Japan.

The Japan Times recently reported that Shake Shack will open its first Tokyo location in 2016, thanks to its partnership with Sazaby League Ltd., the famed company that assisted Starbucks Coffee with its Japanese expansion. Nine more outlets will crop up across the country after the opening of that flagship location, according to Nikkei Asian Review.

In a press release, Shake Shack CEO Randy Garutti said, “We are absolutely thrilled to bring our first Shack to Tokyo. For years, a tremendous amount of fans have asked us when we would come to Japan.”

Meanwhile, Taco Bell president Brian Niccol released a statement in which he noted that the “key element to our growth strategy includes focusing on restaurant development both domestically and globally.” Niccol isn’t limiting the scope of those efforts to Japan—in fact, The Daily Meal reported that Taco Bell will more than quadruple its current number of overseas locations to 1,300 by 2017 in a host of countries, including the U.K., Poland, India, Korea, Chile, and Peru, along with Japan.

However, Japanese customers may be wary of the Tex-Mex giant’s expansion into their already troubled fast food market, due mostly to the recent string of controversies in the country’s McDonald’s outlets, which have prompted droves of former patrons to eat at home or buy from Japanese convenience stores. Critics argue that Taco Bell’s record has been even more checkered: from a 2011 lawsuit that slammed the chain for false advertising about its then “35% beef meat mixture,” to the company’s more recent disclosure that its meat is 88 percent beef, with the remaining ingredients having admittedly “weird names” that are nonetheless “safe and approved by the FDA.”

And while that spotty history may be a hurdle for Taco Bell’s future in Japan, Shake Shack’s reputation for fresh ingredients could help it ward off the troubles that have confronted its more scandal-plagued competitors. With Cage8 noting that Shake Shack “has been consistently well reviewed in the markets it has expanded into,” although the New York Times has dinged the promising chain for consistency issues, particularly at its Brooklyn location.

—Kyle Mullin

Image: “Shake Shack Double Double” by Lucas Richarz on Flickr, used under CC license 

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