The concept of franchising
represents a way through which a successful business or brand can expand rapidly by offering a business model which works with local owners of local businesses. Franchise owners
invest a franchise fee i
n return for the ownership of a business which is proven to be successful. In this article, our company formation consultants in Japan
explain different aspects related to how to start a franchise business in Japan
Common methods of domestic and international franchising in Japan
The most commonly utilized method for local franchising in Japan is the direct franchising. Large franchise chains, like convenience stores, have an area franchisee which deals with multi-unit franchises in a certain area.
The domestic legislation or commercial issues do not affect the prevalence of, or the preference for, these methods domestically. Our Japan company formation
advisors can offer more information related to these methods.
International franchisors in Japan generally utilize master franchise agreements to operate in the domestic market.
These agreements are mainly used because it is quite hard to verify and manage the daily activities of a franchise business from outside of the country.
A local brand which intends to expand its business outside of the country
generally utilizes a simple licensing or franchising agreement
The main factors which establish the structure utilized include:
• Domestic regulations on licensing or franchising are stringent;
• The franchisor wants to maintain the business style.
A brief overview of the franchising businesses in Japan
Usually, franchisors in Japan
are set up as joint-stock companies
. The opening of such business entities in the country is effectuated by following the Companies Act and they are administered by the Ministry of Justice.
The joint-stock company formation in Japan necessitates the articles of incorporation and other incorporation documents to be made ready and registered at the appropriate legal affairs bureaus. Our company registration agents in Japan can assist you to open such a company here.
After the incorporation, the business owners have to prepare the financial statements and so on and to organize a shareholders’ meeting every year.
If you would like to know more about buying a franchise in Japan
, or for assistance related to setting up a company in Japan
, please get in touch
with our friendly staff.