Wild And Winning Concept
Crepe concept from Japan is entering U.S. centers.
Susan H. Fishman

Crazy Crepes has plans to open more units in the U.S.

With a proven track record in Japan, Crazy Crepes is now making a name for itself in the U.S. Shopping Center Business spoke with one of the owners, Ben Kitay, about the new crepe concept (that has an average of one new store opening per week) and its recipe for success.

SCB: Can you tell us a little bit about how you got started?

Kitay: The company was started in 2000 when Greg Petro and myself were living in Japan working for Coca-Cola. We noticed the popularity of the crepe shops in Japan. Very few were branded, but all were doing great business. Also, our kids loved the product, which gave us the thought that the product would work not just in Japan, but around the world. We found the crepe product in Japan that we thought had the best taste, and we sought out the owner of that shop. It turned out the owner was a former investment banker who had several businesses, and we partnered with him to improve the product and develop a brand that we could build into a chain.

SCB: How many locations do you currently have?

Kitay: We currently have 130 locations. Most of them are in Japan, but we also operate in the U.S., Korea and the Philippines. In the U.S., we have locations in Nevada, California, and Hawaii.

SCB: Do you have specific goals in terms of growth?

Kitay: We don’t really have specific goals about the number of locations we operate. Our development is driven by the availability of franchisees.

SCB: What types of locations do you like?

Kitay: We look for locations that have high foot traffic. We like malls, but our concept works anywhere people are leisurely shopping or having a good time. In Japan, we have stores in malls, amusement parks, game centers, big-box discount stores and anywhere people would enjoy a treat.

SCB: Tell us about a couple of your newest locations.

A kiosk environment works well for Crazy Crepes, but the company also takes inline space at some centers.

Kitay: Our newest store is in a Chelsea Premium Outlet Mall in Waikele, Hawaii.  Chelsea has been a great partner of ours for over 6 years. Our highest grossing store is in a Chelsea development in Japan. Our store has the highest revenue per square foot in the mall. We are also developing two new stores in central Florida right now.

SCB: Can you describe the interior of the store? What were your design goals?

Kitay: The stores range from 60 to 100 square feet. Kiosk-type arrangements work best for us, but we have been quite successful with in-line stores, also. The interior of the store is almost all prep area, with equipment and sanitation, and the stores usually have no seating. The key to our merchandising is the Japanese-made crepe models that display each menu item in detail. They are colorful, eye-catching and very descriptive. Our product is usually priced from $3.50 to $6. We offer both dessert treats and light meal crepes like Teriyaki chicken and tuna. Our crepe is light, sweet and soft (not crispy) and has several ingredients that set its taste apart from other crepe competitors. Our design goal is to catch the eye of the passing consumer and to quickly have them understand the nature and benefits of the product. We also highlight our crepe-making process. The crepe-cooking is a nice show and sends out a very pleasant, pastry-like, sweet smell.

SCB: How do you go about choosing franchisees?

Kitay: All of our stores are franchised, and we look for franchisees with the appropriate level of available capital and some food-service experience. The average franchisee operates one or two stores.

SCB: Who is your target audience?

Kitay: The Crazy Crepes consumer is typically female, 14 to 28 years old, and male or female, 14 to 17 years old.  Also, our light meal crepes appeal to the 18-34 crowd.

SCB: What about competitors? What sets Crazy Crepes apart?

Kitay: We have several competitors in Japan, and not many elsewhere, at the moment.  Our product is simply better, our operations are tight, and our merchandising is the best in the business. We win wherever we go if we maintain those standards.

SCB: Why would shopping center developers, owners or managers want Crazy Crepes for a tenant?

Kitay: Landlords love us because we have a proven, branded concept that can fit into previously un-rented space and produces very high sales per square foot. Also, we offer something totally unique in every market except Japan. We actually drive traffic for malls and developers.

SCB: What about future growth?

The crepe-cooking process is important to Crazy Crepes, so the company likes to have space where it can be the center of attention.

Kitay: Our growth is unplanned.  We don’t advertise; we don’t go looking for franchisees. When a prospective franchisee has serious interest, we go through our process, help them choose a location and get them open and making money.  We’re not looking to grow by leaps and bounds quickly, but rather just do it right, slowly and with the best available franchise partners and developers.

SCB: Can you share recent sales figures with us?

Kitay: Our annual retail sales are about $30 million as of 2006.

SCB: Finally, what do you attribute the success of the company to?

Kitay: We are successful because we’ve really taken the time to make a great product, and we haven’t tried to grow it too quickly. We maintain tight control over the quality of the ingredients and the preparation of the products. Also, we’ve taken an old idea, and combined it with our branding skills learned from Coca-Cola, and really made a world-class business model. Our food cost is low, rent is low, labor is low, initial investment is low — all compared to the rest of the food-service business.