JAPAN'S BIG MAC In the land of sushi, Den Fujita operates McDonald's biggest overseas venture.
By Frederick Hiroshi Katayama

(FORTUNE Magazine) – DOES DEN FUJITA really believe that eating hamburgers will make the Japanese tall and blond? Or that he somehow got his business acumen from Jews who settled in Osaka after a migration lost in the mists of history? Perhaps not. But the president of McDonald's Co. (Japan) certainly believes that an entrepreneur must be a master showman, ready with the quotable phrase. This supersalesman has overcome formidable cultural barriers to make hamburgers part of the Japanese diet and McDonald's the No. 1 fast-food business in the land of sushi. In 15 years sales have mushroomed from zero to $770 million a year. McDonald's (Japan) is the U.S. company's largest overseas venture and accounts for 36% of foreign sales. Fujita vows to double sales by 1988. The growth in Japan of ''Makudonarudo,'' as the Japanese pronounce . McDonald's, wouldn't have been possible without Den Fujita, whose jet-black hair and sturdy build belie his 60 years. A self-made millionaire, he is an unusual amalgam of East and West. In private, the supreme marketer of the American hamburger is very Japanese. He will choose a bowl of noodles over a beef patty anytime. His public style, however, is that of a shoot-from-the- hip, American-style businessman who confronts problems and people head on, smiles a lot, and loves a good laugh. He has his first name ostentatiously monogrammed on his shirt cuff ''to show people, like a movie actor.'' Most Japanese talk in circles, but Fujita gets right to the point. Forget consensus, that traditional Japanese management style. Fujita runs a one-man show. He was always different. He got his iconoclasm from his father, Ryosuke, an electrical engineer who worked for a British company in Osaka before World War II. The elder Fujita was so outspokenly opposed to the war that the military police tracked his every move. He renounced the Emperor's divinity before the Emperor did. ''My father told me I should speak out,'' says Fujita. His mother, a devout Methodist, instilled in him the will to succeed. After the war she vowed to build a church -- something her small congregation had never had -- and against great odds got the job done. ''If a woman could do this,'' says Fujita, ''I felt that with a strong will, I could do anything.'' Fujita grew up in a Japan at war. Most students of his day were idealists who debated philosophical and moral issues. Fujita is remembered by classmates as a realist at odds with his country's tradition of conformity. ''He wasn't the follower type,'' recalls Naozoh Itoh, captain of a middle-school track team on which Fujita was a runner. From 1944 to 1948 Fujita was a student at the elite Matsue High School -- the Japanese equivalent of a college preparatory school -- in southern Japan. Like other students, he was put into a factory to help the war effort and worked in a Hitachi Metals plant. Just before the war ended, he was pressed into military service but saw no action. Returning to Matsue High School, he gained experience in leadership and showmanship as head cheerleader of the school's sports teams. While other squads rooted from the banks of the Seta River at the annual boat race in Kyoto, Fujita marched his cheerleaders onto a bridge and dangled one member of the squad at the end of a rope over the water. ''If you hang someone from the bridge, you can be showy,'' he says. ''I always think differently. That is important in business.'' He was also different from his fellow law students at the University of Tokyo, Japan's most prestigious school. Many graduates went on to become bureaucrats, but Fujita became an entrepreneur -- a rare breed in the class of 1951. Even before graduating he worked as an interpreter for the American occupation forces, peddled appliances to the GIs, and established Fujita & Co., a trading company, to import women's accessories. Fujita & Co. now has accounts with 250 department stores and retail outlets. It sells high-quality fashion goods such as Dior handbags, and imports and exports food products. Last year Fujita & Co. recorded sales of $116 million. While working as an interpreter, Fujita first encountered American Jews. Impressed with what he regards as the Jewish talent for business, Fujita has concocted a dubious theory to explain why such native-born Osakans as he and Konosuke Matsushita, founder of Matsushita Electric, are naturally adept at business. He argues that Jews settled in Osaka, a center of commerce, in some forgotten period in the city's early history and passed on their business know-how to the Osakans. Among the four books Fujita has written on how to succeed in business is one titled The Jewish Way of Doing Business. As proof of Osaka's Jewish connection, Fujita says that the city's official symbol is a replica of the Star of David. Actually Osaka's symbol is derived from a miotsukushi, or maritime channel marker, and looks like a wineglass with three stems. Fujita made his McDonald's connection in 1970, when Japan was about to open its food industry to foreign investment. Steven J. Barnes, now chairman of McDonald's International, traveled to Tokyo to find a partner. A friend of Fujita's put him in touch with Barnes. Compared with the other contenders Barnes interviewed as a potential partner, including major Japanese trading companies, Fujita was small fry. But Barnes concluded that he had the right ingredients for McDonald's. He was an entrepreneur, a qualification high on McDonald's wish list. Barnes remembers being immediately impressed with Fujita's ''open-mindedness and 100% commitment.'' Barnes got the impression that the other candidates he talked with viewed a Japanese McDonald's as simply another investment, whereas Fujita seemed willing to devote his personal energies to the joint venture. In May 1971 McDonald's put up half of the $150,000 capital. Fujita and a Japanese bakery invested $37,500 each. Fujita later bought out the bakery's shares. BUT WHAT Fujita recalls as a ''big argument'' soon erupted with McDonald's headquarters in Oak Brook, Illinois. Oak Brook wanted its Japanese partner to follow the U.S. pattern of locating restaurants in suburbs. Fujita stubbornly resisted. To him, the masses of young pedestrians that flood Japanese cities were more promising customers than affluent but tradition-minded car owners in the suburbs. Fujita got his way. He launched the first Japanese McDonald's on the ground floor of the fashionable Mitsukoshi department store on the Ginza in Tokyo. He didn't spend a single yen on advertising, save for some handbills offering free Cokes. Pedestrians mobbed the store on opening day and kept coming. A year later the Ginza outlet set a McDonald's world record for one-day sales: $14,000. He taught Oak Brook a lesson: Urban locations can be profitable. Inner-city McDonald's now flourish in the U.S., Germany, and the Netherlands. McDonald's recognized Fujita's achievement in 1984 by naming him an advisory director of the parent corporation. Most foreign fast-food chains have been slow to take root in Japan. Some chose the sleepy suburbs for their stores and made what Fujita believes is the further error of playing up their U.S. origins in ads. Fujita believes that the way to market a Western product in Japan is to concentrate on the product, not the country of origin -- sell Dior, not France. Fujita teaches employees a few English phrases to use among themselves (''Wrap up, please,'' when a Big Mac is ready for packaging) to provide an exotic touch, but his outlets do not fly the American flag, as some Denny's restaurants do. He says Japanese visitors to the U.S. are often shocked to discover that McDonald's was American-born. But Fujita faced cultural obstacles too. Unlike the entrepreneurs who took American fast food to Europe and Canada, Fujita had to induce his customers to try a new diet. Had he failed, the Japanese might still be a piscivorous people; he argues that eating fish leaves people looking ''pale-faced and undignified.'' HE PROCEEDED cautiously. For the first three years Fujita didn't advertise, relying on word-of-mouth and his own flair for free publicity. Now he caters to the rapidly Westernizing habits and palates of Japanese youth by airing TV commercials aimed at kids. Fujita figures that if a child eats a hamburger, he is hooked for life. Hamburgers have become one of the most popular foods among Japanese children, and the ministry of education has complained that schoolchildren are losing their dexterity with chopsticks. Per capita meat consumption has more than doubled over the past two decades to 2.5 ounces a day. McDonald's (Japan) buys 27% of the frozen potatoes and 8% of the beef imported by Japan. All of the potatoes are Idahos, imported through Fujita & Co. The beef comes from Australia as well as the U.S.; Fujita buys it from another trading company. Blond Japanese are yet to be found, but the average weight of the populace is up. Fujita is happy to take credit for the increase: ''That is a good tendency. Japanese must be bigger and taller.'' Fujita bucked another conventional formula that had worked for McDonald's in the U.S.: franchising. Nobody seemed to want to invest in a McDonald's franchise, so Fujita bought prime property near railway stations and shopping centers and built his own Golden Arches. That puts him in an unusual but highly profitable position: He not only owns 50% of McDonald's (Japan) but also is far and away the parent company's largest franchisee. He owns 480 of the 560 stores in Japan, and he plans to open 50 to 60 a year. McDonald's Japanese fast-food rivals, such as MOS Food Services (1985 sales: $141 million), a burger chain that last year opened over 100 outlets, contend that McDonald's isn't innovative. ''They bring in everything from the U.S.,'' says Kazuo Watanabe, vice president of MOS, which stands for Mountains, Ocean, Sun. MOS has achieved acclaim for developing a soy-sauce-flavored teriyaki burger. MOS's franchise network is growing fast, but its sales are less than a fifth of McDonald's. Far ahead as he is, Fujita always runs scared. He is obsessed with disaster. He is certain a major earthquake will strike Tokyo any day now, and he is more prepared than an Eagle Scout. He provides every employee with a hard hat and gloves in case the Big One hits Big Mac. The gloves would allow employees to slide down ropes to the ground. He keeps a helmet in his 44th-floor office and another rests behind his pillow at night. RUNNING SCARED has made Fujita a wealthy man. Most of his earnings he reinvests. What he takes out of McDonald's accounts for one-third of his personal income of $1.3 million a year; the rest comes from Fujita & Co., real ( estate ventures, and stock dividends. Eighty percent of his take-home income goes to the tax collector, leaving him $250,000 a year to live on. Other than a few indulgences like a chauffeured Mercedes-Benz, Fujita lives simply. He doesn't drink or take pleasure trips, and unlike most Japanese businessmen, he rarely golfs. He deals in Dior accessories but sports a $6 Casio watch. His idea of a big evening is to read a book on Japanese linguistics at his home in an expensive suburb of Tokyo, where he lives with his wife, Etsuko, his sweetheart in high school days. Their two sons, Gen and Kan, are grown; both work for Fujita & Co. Fujita hasn't changed much over the years. ''He works with the energy of an active volcano,'' says Keigo Tatsumi, deputy president of the Sanwa Bank, an old friend. Fujita still puts in 12 hours a day and continues to plug away in the back seat of his Mercedes-Benz as he heads home in the evening. And his dedication to selling hamburgers shows no sign of waning. Analysts say the fast-food market is maturing, but once again Fujita is going against the grain. He sees further growth in the burger business for at least another 15 years. He is not wasting a single minute. Callers to McDonald's headquarters put on hold are subjected to a recorded sales pitch. He has budgeted $32 million for advertising and promotion to beef up demand. Each year, reckons the pragmatist, 800,000 people die in Japan, but 1.5 million are born. ''The 800,000 going to the cemetery are scrap iron. They won't eat burgers,'' he says. ''But the 1.5 million will.''