KFC Japan was originally formed as a joint venture between the American parent and the Japanese Mitsubishi Corporation. Following four years of negotiations, Mitsubishi was awarded the franchise rights to KFC in Japan, and a test store was opened at the Osaka World Expo in March 1970. After the debut proved successful, the first proper store was opened in the suburban location of Nagoya in November 1970. The American parent wanted suburban locations, whereas Mitsubishi argued for city centre locations, as cars had not been widely adopted in Japan at that time. Two more locations were opened in Osaka, but the stores struggled, and after less than a year of operation, had lost JP¥100 million. As a result of this failure, Mitsubishi's original plan for urban locations was pursued. The first outlet under the new approach opened in 1972 in Kobe, an upmarket residential area with a large Western expatriate community. The strategy was a success, and by December 1973, 100 outlets had been opened. Harland Sanders himself visited the Japanese operations in 1972, 1978 and 1980. In 1983 there were 390 outlets with annual sales just under $300 million. By this time Japan was KFC's largest single foreign market. In August 1990, KFC Japan was listed on the Tokyo Stock Exchange. KFC benefited from the economic boom in Japan during the 1980s, and grew to 1,000 outlets with annual sales of $1.2 billion by 1993. However, the rapid expansion of outlets saw franchisees competing for market shares with each other, and around 100 outlets closed down in the mid-1990s. In 2000, KFC Japan reported sales of nearly $598 million. In December 2007, Mitsubishi assumed majority control of KFC Japan in a JP¥ 14.83 billion transaction.
Christmas
In 1970, Takeshi Okawara—manager of the first KFC restaurant in Japan—began promoting fried chicken "party barrels" as a Christmas meal intended to serve as a substitute for the traditional American turkey dinner. Okawara marketed the party barrels as a way to celebrate Christmas, a holiday which lacked widespread traditions in Japan at the time. KFC Japan expanded the promotion nationwide in 1974 with its long running "Kentucky for Christmas" or "Kentucky Christmas" advertising campaign. Eating KFC food as a Christmas time meal has since become a widely practised custom in Japan., in Japan, Christmas sales of KFC made around Christmas Eve account for nearly five per cent of annual revenue.
