It’s been only 10 weeks since Wetzel’s Pretzels opened its first Far East franchise in Japan, but co-founders Rick Wetzel and Bill Phelps are astonished to say it is on track to being the company’s most profitable store in the world.
Wetzel’s shops average about $500,000 each year in revenue. Based on its first two months, the Tokyo store is on target to hit about $3 million in its first year. Phelps said that sales seem to reflect more than just a novelty factor.
“We were just stunned,” he said. “We were waiting for it to fall off, because it didn’t make any sense to us. But the numbers just kept coming in.”
While U.S. customers typically buy only one pretzel to snack on while shopping, Japanese customers are buying in bulk.
“In Japan, they’re buying five pretzels at a time,” Phelps said, “and that’s because we had to limit it to five, or they would buy 10 or 20.”
The Japanese store brought in larger bags and began marketing five-pretzel variety packs to accommodate customers’ tendency to buy in bulk.
The top pretzel flavors selling in Japan include the original salted version, along with cinnamon and almond crunch. Two additional flavors – ginger with brown sugar, and curry – were created to cater to local palates. The pretzels sold in Japan are also 30 percent smaller than those sold elsewhere, to conform to that nation’s smaller portion sizes.
Wetzel’s opened its first location in Redondo Beach in 1994, and the chain now has more than 250 stores in the United States and other countries, including India, Canada and Mexico.
Wetzel said the store’s performance has made the company more optimistic about growing in the region.
The company plans to open 10 more stores in Japan in the next two years, and it is screening potential franchisees in countries such as China, Taiwan, Malaysia and Singapore.
“It’s a great launching pad for us into all of Asia,” he said.