When Koji Kanematsu moved from Japan to the U.S., he was shocked to find that while sushi was everywhere, onigiri — a centuries-old Japanese comfort food — was nowhere to be found. That realization sparked the beginning of a now-thriving restaurant brand that’s proving its ability to scale quickly and profitably.

“I grew up eating onigiri, but when I came here, I couldn’t find it anywhere,” he told 1851 Franchise’s Nick Powills on an episode of "The Franchisor Hot Seat" podcast. “I really missed it, so in 2008, I started selling it. I believed it could revolutionize fast food here — it's quick, nutritious and simple.”

Kanematsu is the founder of Onigilly Japanese Kitchen, a fast-growing concept offering freshly made Japanese rice balls in compact mall kiosks and storefronts. Since launching in 2008 with a food cart in San Francisco, Kanematsu has built a business model that combines Japan’s rich culinary tradition with automation and simplicity, drawing inspiration from Subway’s efficiency and American tastes.

“We use technology from Japan, like rice-cooking machines and robotics,” he said. “Our operations are simple. We only cook rice on-site and get weekly deliveries of pre-cooked fillings from our commissary kitchen. The setup is similar to Subway—no hood, no complicated kitchen equipment.” 

A transcript of Powills’ interview with Kanematsu has been provided below. It has been edited for brevity, clarity, and style.

Powills: How did you accidentally fall into franchising? What's your franchise backstory?

Kanematsu: Our concept is Onigilly Japanese Kitchen. We’re technically a restaurant, but we're in a unique space. Onigiri is very popular in Japan — it’s a rice ball wrapped in seaweed with traditional fillings like sour plum or salmon. It has over 2,000 years of history and is comparable to a sandwich in the U.S. — portable, healthy and convenient.

I moved to the U.S. in 2006. I grew up eating onigiri, but when I came here, I couldn’t find it anywhere. I really missed it, so in 2008, I started selling it. I believed it could revolutionize fast food here — it's quick, nutritious and simple.

We started with a food cart in San Francisco. At first, we struggled because people didn’t know what onigiri was. Many expected sushi and were confused when they saw cooked ingredients instead of raw fish. Based on customer feedback, we created an “American-style” onigiri — two rice patties with fillings like teriyaki chicken, spicy shrimp, garlic and bacon.

We opened our first storefront in the Financial District, then expanded to five locations in the Bay Area. During COVID, we struggled because our stores were in office-heavy areas. We pivoted to shopping malls, and it was a huge hit. Malls turned out to be a great fit — people wanted something quick and portable, and onigiri worked perfectly.

Our vision from the beginning was to expand nationwide. We always aimed to franchise. Our model is scalable — we use technology from Japan, like rice-cooking machines and robotics. Our operations are simple. We only cook rice on-site and get weekly deliveries of pre-cooked fillings from our commissary kitchen. The setup is similar to Subway — no hood, no complicated kitchen equipment.

Powills: I love that. A few follow-ups — how did you raise the funds to do this back in 2008, especially during a market crash?

Kanematsu: I didn’t have a credit history as an immigrant, so banks rejected my loan applications. Landlords also said no. I found an NPO incubation kitchen in San Francisco called La Cocina. They supported immigrant entrepreneurs and provided us with a commercial kitchen.

We started at farmer’s markets, which required minimal investment — just a table and tent. Later, we got a loan from an NPO lender and bought a food cart. We built credit history and, after three years, secured a bank loan to open a restaurant.

Powills: Were you stressed during that time?

Kanematsu: Not really. My wife had a full-time job, so I didn’t have financial pressure. That gave me the freedom to treat it like an R&D phase. If I had needed the business to support my family, it would have been much harder.

Powills: Early on, were your customers mainly Japanese Americans, or were non-Japanese Americans willing to try onigiri?

Kanematsu: I targeted American audiences from the start. Our first pop-up was at a Japanese festival and sold out — lots of Japanese Americans there. Then we went to street food festivals and did well with foodies. But at a music festival, we sold only 400 of 4,000 onigiris because most attendees didn’t know what onigiri was. American audiences unfamiliar with Japan didn’t get it — people expected pizza or burgers.

Powills: Did Japanese Americans respond with excitement because they hadn’t seen onigiri available in the U.S.?

Kanematsu: Yes. Many hadn’t seen onigiri here since childhood — only in Japanese grocery stores or in Hawaii. They were excited to see it available fresh.

Powills: Flash forward — where is the business today?

Kanematsu: We have five locations and are opening two more this spring. We opened our first storefront in 2012, and aside from COVID, revenue has grown every year. We were profitable from month one.

At first, it was hard to educate people, but once they tried it, they understood it. We have strong repeat customer rates, even in competitive areas like San Francisco’s Financial District. Shopping malls have worked well — we expected a drop-off after opening, but sales have continued to grow.

In Japan, onigiri has a 2,000-year history. It's convenient and healthy, and people get it once they try it. We believe it can work anywhere.

Powills: Have friends or family from Japan been surprised that you figured out how to bring onigiri to the U.S.?

Kanematsu: They think onigiri is already popular here because of Japanese grocery stores and TV shows. But we’re targeting outside of those areas — non-Japanese customers. That requires education, but it’s what makes our model different.

Powills: The mall seems like the perfect setting. Do you think part of the success is that you can hook new customers who are just walking by?

Kanematsu: Yes. It’s functional. Like Auntie Anne’s pretzels, we don’t need a storefront — just a kiosk in the mall. Not everyone wants a full meal, so a light snack like onigiri fits perfectly. People see our open kitchen, get curious, try it, and enjoy it.

Powills: Let’s talk about investment. What’s the range in your FDD?

Kanematsu: We list $260,000 to $600,000. If you take over a second-generation space or build a mall kiosk, it can be lower. We don’t need a hood — just power and water.

Powills: What are you putting in Item 19 for performance?

Kanematsu: Last year, our shopping center location did $1.7 million. Our newest location is approaching $2 million.

Powills: That’s significant. Most restaurant brands doing $1.5 to $2 million cost at least $1 to $1.5 million to open. You’re doing it for $200,000 to $600,000. That’s best-in-class. For comparison, Auntie Anne’s average unit volume is $768,000, and your investment range is about the same. That makes your model very compelling.

Kanematsu: In Japan, onigiri is prepackaged and produced in large automated facilities. Here, because of food safety laws, we had to do fresh-made, like Subway. We brought over machines from Japan and created a hybrid model — part robotic, part human.

That gives us great throughput even in a 300-square-foot space. We keep prices low — $10 gets you two onigiris. It’s filling, healthy, and affordable. The combination of onigiri’s uniqueness, our operational efficiency, and customer demand makes this model work. It’s been proven in Japan, and now we’re proving it in the U.S.

Powills: I’ll close with this: You should be proud. You've built a beautiful brand, weathered tough times, and created something scalable. Annie Anne’s investment is nearly identical to yours, yet you’re more than doubling average sales. You’ve engineered a model that hits all the key points—speed, value, customer experience, and brand strength. Great job.

Watch the full interview here. 

To find out more information on costs to buy this franchise, please visit https://1851franchise.com/onigilly.