Sarku Japan steps up U.S. expansion

Japanese quick-service chain Sarku Japan has stepped up its expansion in the New York metropolitan area with the planned opening of three new freestanding restaurants before the end of the year.

The Toronto-based company, which already has 231 company-owned and franchised locations in 37 states, said it expects to open the New York branches in Yonkers, Manhattan and Queens over the next several months.

While about two-thirds of Sarku’s outlets are company operated, all of the New York units will be franchised, said Bruce Kim, assistant vice president of franchises. The 25-year-old privately held concept began franchising about four years ago.

In addition, Sarku has plans to focus on the New York-New Jersey-Washington, D.C., corridor and open a total of 15 branches throughout the area during the next year, Kim said. Five more outlets are expected to open elsewhere the United States during that period.

Half of the new units will be company owned. “We believe in putting our money where our mouth is,” Kim said.

Sarku, which has long focused on placing food court units in malls, more recently has broadened its horizon to include a larger freestanding model.

“Traditionally, we operated exclusively in malls and food courts,” Kim said. “But like Panda Express and Chick-fil-A, we have outgrown the food courts. This country just has a finite number of malls.”

Sarku currently has 17 freestanding units. The freestanding stores cost between $283,000 and $562,000 to open.

The quick-service concept generates an average per-person ticket of less than $10 from a menu featuring signature teriyaki dishes cooked on flat Teppanyaki grills, as well as tempura chicken and shrimp, and other items.

“People often think of Japanese food as being fancy like Benihana, but we’re not,” Kim said. “We’re actually more like McDonald’s. We provide a meal for good value. We’re a volume-driven business.”

Japanese sushi and sashimi also are available in larger Sarku Japan freestanding locations.

Although the concept has served the same core menu for 25 years, Kim said, the company is in the process of researching new dishes to expand the menu. “We will adjust as the market demands,” he said.

While Kim declined to disclose sales figures for Sarku Japan, company officials earlier told researchers for the Nation's Restaurant News Top 200 census that the chain had 2011 U.S. systemwide sales of $179.1 million, an increase of 12.01 percent from $159.9 million a year earlier. The chain's 2011 estimated sales per unit, as calculated by NRN research, was about $909,100.

Sarku Japan also has 10 locations in Colombia, South America, operated by a master franchisee.

Editor's Note: This story has been updated from a previous version to reflect the correct  2011 estimated sales per unit for Sarku Japan.

Contact Paul Frumkin at [email protected].