REV: JULY 20, 2004
W. EARL SASSER
Benihana of Tokyo
Some restaurateurs like myself have more fun than others, says Hiroaki (Rocky) Aoki, youthful president of Benihana of Tokyo. Between 1964, when he opened his first location, and 1972 he had gone from deficit net worth to being president of a chain of 15 restaurants that grossed over $12 million per year.
By 1972 Benihana was basically a steakhouse with a difference--the food was cooked in front of the customer by Japanese chefs, and the decor was that of an authentically detailed Japanese country inn. From a humble 40-seat unit opened in midtown Manhattan in 1964, Benihana had grown to a chain of 15 units across the country. Nine were company-owned locations: New York (3); San Francisco; Chicago; Encino and Marina del Rey, California; Portland, Oregon; and Honolulu. Five were franchised: Boston, Fort Lauderdale, Beverly Hills, Seattle, and Harrisburg, Pennsylvania. The last unit, Las Vegas, was operated as a joint venture with Hilton Hotels Corporation. Rocky, who was a former Olympic wrestler, described his success as follows: In 1959, I came to the United States on a tour with my university wrestling team. I was 20 at the time. When I reached New York, it was love at first sight! I was convinced that there were more opportunities for me in America than Japan. I decided to enroll in the School of Restaurant Management at City College basically because I knew that in the restaurant business I’d never go hungry. I earned money those early years by washing dishes, driving an ice cream truck, and acting as a tour guide. Most importantly, I spent three years making a systematic analysis of the U.S. restaurant market. What I discovered was that Americans enjoyed eating in exotic surroundings but were deeply mistrustful of exotic foods. I also discovered that people very much enjoy watching their food being prepared. So I took $10,000 I had saved by 1963 and borrowed $20,000 more to open my first unit on the West Side and tried to apply all that I had learned. The origins of Benihana of Tokyo actually date back to 1935. That was when Yunosuke Aoki (Rocky’s father) opened the first of his chain of restaurants in Japan. He called it Benihana, after the small red flower that grew wild near the front door of the restaurant. ________________________________________________________________________________________________________________ Professor W. Earl Sasser and Research Associate John Klug prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. This case was made possible by the cooperation of the Benihana Corporation and Russ Carpenter, Executive Editor of the magazine Institutions/Volume Feeding. Copyright © 1972 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
Benihana of Tokyo
The elder Aoki (Papasan), like his son who was to follow in the family tradition, was a practical and resourceful restaurateur. In 1958, concerned about rising costs and increased competition, he first incorporated the hibachi table concept into his operations. Rocky borrowed this method of cooking from his father and commented as follows: One of the things I learned in my analysis was that the number one problem of the restaurant industry in the United States is the availability and cost of labor. By eliminating the need for a conventional kitchen with the hibachi table...