Heidi’s Frogen Yozurt Announces Details of Its Japanese Venture

Tokyo-based C. Itoh & Co., one of the world’s largest trading companies, will participate in a $500,000 venture with Heidi’s Frogen Yozurt Shoppes to serve up the Laguna Hills firm’s frozen concoction to Japanese consumers.

Heidi’s, which previously had disclosed that Nissin Sugar Manufacturing Co. was involved in the overseas venture, said the two Japanese firms will pay $500,000 for the right to open as many as 350 Heidi’s stores within the next three years. Up to five Japanese franchises will be in business by next summer.

Heidi’s said it already has received an $80,000 deposit from the companies and will get the balance later this month.

Heidi’s announced its plans to enter the Japanese market last month, but the company declined to divulge the specifics of the deal or its partnership with C. Itoh, which reported revenues of more than $100 billion in its 1987 fiscal year, which ended March 31.

Initially, Heidi’s will be the direct supplier of the equipment and yogurt ingredients for the Japanese stores, according to Brian L. Pallas, Heidi’s executive vice president.

In addition, Heidi’s will receive 2% of the gross revenues from the Japanese stores. A yogurt market analyst said that each of Heidi’s Japanese franchises might generate sales up to $150,000 annually.

The companies have entered an agreement with Dentsu, one of the world’s largest advertising agencies with more than $5.3 billion in billings last year, to promote the stores.

If the stores open as early as next summer, Heidi’s could become the second frozen yogurt chain in Japan, a country where analysts said the product is a popular--but acquired--taste.

Heidi’s currently operates 73 stores in the United States, including eight company-owned outlets. Heidi’s has opened six U.S. stores and sold franchises for eight additional stores since Aug. 30.

In an unrelated matter, Heidi’s said that because it incorrectly recorded equipment sales, it has increased its previously reported loss and lowered its sales for the three months and six months ended June 30.

The restated figures increase the third-quarter deficit by $14,455 to $255,078 and decrease sales by $96,371 to $1.1 million. For the six months, the loss is increased by $37,831 to $487,697, and sales are decreased by $377,213 to $2.1 million.

Pallas said Heidi’s incorrectly reported sales of equipment to franchisees before the sales were actually completed.