US-based manufacturer and store franchise Rocky Mountain Chocolate Factory has signed a licensing agreement enabling it to enter Japan.
The Company will pay a Master License Fee to RMCF Asia, giving the Hong-Kong-based business the right to open Rocky Mountain Chocolate Factory stores throughout Japan.
RMCF Asia will also open test stores in Hong Kong and Shanghai with the hope of also breaking into China.
International expansion integral to growth
Franklin Crail, Chairman and CEO of Rocky Mountain said: “With our entry into Japan and potentially into China, we believe an international expansion in Asia and other countries could play a very significant role in our Company's growth for the foreseeable future."
"Japanese consumers have exhibited great enthusiasm for our brand and our products, as evidenced by the strong sales generated by a test Rocky Mountain Chocolate Factory store that our licensing partner opened in the upscale AEON Lake Town Mall in a suburb of Tokyo in December 2011, and we expect that consumers in other Asian countries will show the same enthusiasm we have seen to date in Japan,” he continued.
The agreement requires at least 10 new stores to open each year for 10 years, meaning a minimum of 100 stores by 2022.
The licensee RMCF Asia has been give first refusal on an exclusive license for stores in China Taiwan and South Korea.
Rocky Mountain manufactures its own gourmet chocolates and currently operates 371 franchise stores in the US, Canada, Japan and the United Arab Emirates.
American brands popular in Far East
Bryan Merryman, chief operating officer of the company added: “We view the Master License Agreement in Japan as the blueprint for an aggressive international expansion initiative that can accelerate the growth of our retail store network and eventually introduce our gourmet chocolates and other confectionery products to consumers on a global scale."
He said the company would pro-actively seek out prospective international licensees to foster global growth.
Rocky Mountain had been operating a test store in a Tokyo mall for the past four months. Sales in this store were on course to outpace the average Rocky Mountain store in the US.
"Consumer enthusiasm for our chocolate products, as evidenced by the performance of this test store, combined with the popularity of American brands in the Far East, supports our confidence that Japan can become a major market for our products in the future," said Merryman.
Last week, Rocky Mountain announced its fourth quarter and full-year 2012 results.
For the year, the company recorded sales of $34.6m, up 11.2% on 2011. Profit was essentially flat at around $3.9m.