Kyochon Chicken Re-Enters Japan with Arai Shoji Partnership
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South Korean fast-food chain Kyochon Chicken signed a franchise agreement with Japanese distributor Arai Shoji to re-enter the Japanese dining market. The plan targets a Tokyo opening in the first half of 2027.
The deal establishes a multi-unit franchise model that grants regional operating rights across Tokyo. It sets up a pipeline for phased expansion into surrounding cities.
Multi-unit structure replaces single-store bet
Kyochon F&B signed the memorandum of understanding with Kanagawa-based Arai Shoji on September 29. Under the arrangement, the Japanese trading house will handle regional store operations, site selection, staff training and local marketing. Kyochon oversees sauce formulation and kitchen preparation standards.
Arai Shoji brings existing supply chain infrastructure to the rollout. Founded in 1920 as an auction and distribution business, the company acquired Korean food importer Ongane Holdings in 2020. It entered direct food service in 2024 by opening a specialty waffle concept. That network gives Kyochon direct access to established wholesale channels for Korean ingredients rather than building a logistics pipeline from scratch.
We have laid the groundwork for market entry through collaboration with a partner that has strong local distribution networks and a deep understanding of Korean food products.
“Founded in 1920 as an auction and distribution business, the company acquired Korean food importer Ongane Holdings in 2020.”
Correcting the 2015 Roppongi missteps
This venture represents Kyochon’s second attempt to establish a permanent presence in Japan. The chain first entered Tokyo in December 2015 with a flagship store in Roppongi alongside local partner Food Planet. That outlet closed in September 2016 after nine months of trading.
Misaligned pricing and high real estate costs doomed the initial run. The Roppongi outlet priced an 18-piece wing platter at ¥1,800, roughly $11 at the time. That was nearly twice the retail price charged across its domestic South Korean network. Side dishes such as pickled radish, provided complimentary in Korea, were billed at ¥280. Food Planet subsequently ran into financial difficulties and was delisted from the Tokyo market in 2017.
Domestic saturation forces regional expansion
South Korean fried chicken chains face severe margin compression and store saturation at home. Domestic franchise territories are densely packed. Operators have limited headroom to add outlets without cannibalising existing franchisees. Moving into neighbouring Asian markets has become an operational necessity for top-tier Korean fast-food operators looking to sustain system-wide sales growth.
Japan presents substantial structural hurdles despite growing consumer familiarity with Korean dining concepts. Foreign operators face slim margins. Tokyo brings high prime commercial rents, chronic kitchen staffing shortages across metropolitan centres and entrenched competition from domestic karaage chains. Kyochon’s success rests on whether Arai Shoji can price the menu competitively against local convenience chains and specialty chicken shops while absorbing central Tokyo overheads.
Next steps for the Tokyo pipeline
Site selection for the initial Tokyo restaurant is currently being finalised ahead of the planned launch in early 2027. Kyochon and Arai Shoji are reviewing locations. Once the flagship opens, the partners will evaluate operational data and store-level margins before committing capital to secondary locations in adjacent prefectures.
Questions & Answers
Q.What led to Kyochon Chicken's previous failure in the Japanese market?
What led to Kyochon Chicken's previous failure in the Japanese market?
Their 2015 Roppongi store closed after nine months due to misaligned pricing and high real estate costs. An 18-piece wing platter was nearly double the Korean price, and side dishes were charged for, unlike in Korea. Their partner also faced financial difficulties.
Q.How does the new partnership with Arai Shoji differ from Kyochon's previous venture?
How does the new partnership with Arai Shoji differ from Kyochon's previous venture?
The new deal is a multi-unit franchise model granting regional operating rights, allowing for phased expansion. Arai Shoji handles local operations, site selection, and marketing, bringing existing supply chain infrastructure and Korean ingredient access. The previous attempt was a single-store partnership.
Q.Why is Kyochon Chicken prioritising international expansion into markets like Japan?
Why is Kyochon Chicken prioritising international expansion into markets like Japan?
Domestic saturation in South Korea means severe margin compression and limited opportunities to add new outlets without cannibalising existing ones. Moving into neighbouring Asian markets has become an operational necessity for sustaining system-wide sales growth.
Q.What role will Arai Shoji play in the new Kyochon Chicken operations in Japan?
What role will Arai Shoji play in the new Kyochon Chicken operations in Japan?
Arai Shoji will manage regional store operations, site selection, staff training, and local marketing. They also provide existing supply chain infrastructure and access to wholesale channels for Korean ingredients, using their 2020 acquisition of Ongane Holdings.
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