Franchise Business Market in Japan: Key Research Findings 2023

Market Growth of Franchising Business Propelled by Big Franchises

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic market of franchise business, and found out the current status and the trends of market players.

Summary of Research Findings

Robust growth continued in the franchise business market since these types of businesses are based on ‘packaged’ business model that has been proven successful, and thus they are easy to scale. In recent years, SMEs struggling in their original business are joining franchises as a way of business diversification. Moreover, as diversification of the business practice opened a way to start a new business like joining a franchise network with small capital, in tandem with the penetration of side hustle for earning extra income or for becoming a business owner, the number of office workers (individuals) joining as franchisees are on the rise. Strong sales performance of big franchises is contributing to the expansion of the franchise market as well. Although a temporary decline was observed due to impact of the pandemic, the market is showing steady growth.

Due to the rise in demands related to at-home consumption during the spread of novel coronavirus infection (consumption activities due to increased time spent at home), one-price stores increased (such as 100-yen discount stores), while soaring price of precious metals made the business of secondhand dealers /pawn shops brisk. Food services expanded sales with takeouts that can be enjoyed at home, while demand for personal lessons increased at cram schools against the backdrop of temporary school closures. Meanwhile, as the demand for spending less time on household chores increases, businesses that seized the new demands arising from new normal, such as handyman services (businesses that offer day-to-day errands such as house cleaning, tree pruning, etc.,) and household chore assistance services, grew steadily.

Considering the aging society with declining birthrate in Japan, it is likely that educational services and long-term care services will grow stably for years to come. Progress in AI technology and online services are expected to give rise to new services in multiple fields.

Noteworthy Topics

Noteworthy Franchise Businesses

Training gyms and marriage matchmaking services are garnering attention for its expanding demands, against the background of increasing health consciousness, as well as social issues of aging society with declining birthrate and late marriage.

Despite the predicaments faced during the pandemic due to a series of membership suspensions and withdrawals, driven by increasing of health consciousness arising from staying home and telework, fitness clubs managed to get back on recover track in the latter half of 2021. 24-hour fitness gyms, which are mostly franchisees rather than directly owned, has been reducing costs by not having pool and spa and minimizing equipment like showers and basins. Lower membership rates have been propelling customer acquisition. 

Demand for marriage matchmaking service is growing against the backdrop of social issues such as late marriage, declining birthrate, and aging population. Some of the service providers not only started online matchmaking service to increase the number of new applicants among young people, but also organized marriage counseling centers and started franchising them to improve the rate of reaching marriage. By sharing membership data among franchisees, matchmaking opportunities increased across the country. In addition, collective efforts to promote online matchmaking was observed among matchmaking franchises during the pandemic.

Research Outline

1.Research Period: February to April 2023
2.Research Object: Franchisors, franchisees, other related businesses, associations
3.Research Methogology: Face-to-face interviews by our expert researchers (including online interviews), survey via telephone/email, and literature research

What is the Franchise Business Market?

In this research, the franchise business market indicates various businesses run by franchisors and (franchise owners) franchisees (franchise merchants), as well as other related businesses.
Franchising is a management method in which a franchisee acquires rights from a franchisor (franchise owner) to conduct business activities based on the use of its management know-how, products, services, logos, etc., while paying a portion of its sales to the franchisor as a royalty.

<Products and Services in the Market>

Retailers, food services, other service industry businesses

Published Report

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