Japanese Food Service Making Big Moves in China!

Like many international food service retailers, Duskin Corporation, a successful Japanese franchiser and owner of the Mister Donut brand, met with little success when they entered the Shanghai market in 2000. After 9 years of effort and only 5 stores to show for it, the Japanese Company recently decided to give up going alone and partner with the large Taiwan Group, President Chain Store, and to invest a combined $16.5 Million in a new Joint Venture to kick start the brand.  President Chain Store, franchisee of Starbucks, Cold Stone Creamery and 7-11 convenience stores among others, has a long and successful operating history in China with significant financial investments.  This is a great marriage that has an excellent chance of success given the capabilities of both partners, the success of the Mister Donuts brand in Japan and Taiwan and the market entry strategy of its key competitor, Dunkin Donuts.  China is just too large and complicated a market to be developed by offshore franchising as most companies have already figured out.  Dunkin Brands certainly has the financial resources to build their own stores in China to gain some visibility and attract excellent partners over time but they chose to enter the market with the least risk strategy and this usually leads to the lowest rewards.  If I am right, then you can look forward to a very large and successful Mister Donuts brand presence as the retailer quickly becomes the dominant donut brand in China.