How this eatery aims to be the next big mall snack

The founder behind Japanese rice snack chain Onigilly is preparing a retail rollout that aims to turn the once-niche food ubiquitous in Japan into a fixture in Southern California's shopping centers as small food spaces become more common in U.S. malls.

Koji Kanematsu, a former computer systems developer, founded Onigilly after moving to San Francisco from Japan in 2006. The company's name leans into the Japanese pronunciation of onigiri, a small triangular snack made from seasoned short-grain rice and fillings such as cooked tuna, salmon and even fried chicken wrapped in a strip of crisp nori seaweed.

The San Francisco brand, known for compact 300-square-foot storefronts and fast grab-and-go service, has signed franchise agreements for five operators across Los Angeles and San Diego and is negotiating leases at malls including Del Amo Fashion Center, Brea Mall, Ontario Mills and Westfield UTC. The chain these days counts six locations, but the founder is envisioning hundreds more after the concept is tested in Southern California.

“Once people try it, they get it,” Kanematsu told CoStar News. “But before they try it, it’s hard to imagine what it is. That’s why visibility in high-traffic retail is critical.”

That lack of product awareness is the biggest headwind, Kanematsu said, even as rival Asian chains provide competition. Americans often confuse onigiri with sushi, and those expecting raw fish instead of cooked fillings might not feel comfortable choosing the item as a grab-and-go snack. And landlords, he says, still default to proven mall tenant heavyweights such as boba stands, pretzel shops and Jamba Juice-style smoothie stores.

“Good space is always taken by boba,” he said. “We wait for redevelopment or turnover.”

But tailwinds include growing demand for quick, healthy alternatives and the mall industry’s appetite for novelty, which may give Onigilly a runway that didn’t exist when the brand was selling out of carts a decade ago.

Onigilly's expansion plans come as retailers opt for smaller, more flexible formats — with average lease sizes now falling below 3,500 square feet for the first time on record. Such compact concepts are especially attractive to landlords that prioritize visibility, adaptability and high-frequency traffic, according to Nicole Larson, manager of U.S. national retail research for Colliers.

"A kiosk-style onigiri concept checks many of the boxes that owners care about right now: convenience, cultural relevance, and the ability to drive incremental visits without requiring large blocks of leasable space," Larson told CoStar News.

Mall owners are funneling more small-format, high-frequency food tenants into their merchandising plans to replace heavier legacy food courts and diversify daytime traffic, data shows.

One of the country's biggest mall owners, Brookfield Properties, says food tenants now occupy roughly 20% to 30% of gross leasable area in malls, up from only about 5% to 10% a decade or two ago, as developers replace vacant retail space with restaurants, food halls and bars to draw in crowds to offer a competitive allure in response to climbing demand for online shopping.

Kanematsu’s preferred footprint is about 300 square feet, and the format works best in high-traffic corridors where customers want something quick but lighter than Panda Express.

The company's six units include three at California malls: Great Mall in Milpitas, Westfield Valley Fair in Santa Clara and Stonestown Galleria in San Francisco.

To secure locations, Kanematsu originally acted as his own broker, using Placer.ai data to map foot-traffic patterns, visiting malls weekly, and cold-calling landlords when he noticed struggling tenants or dark storefronts.

“I needed to convince them myself,” he said. “The concept is niche, and brokers didn’t always know where it should go.”

Even now, with franchise partners in hand, Kanematsu stays deeply involved in site selection, especially in Southern California where he says permitting can drag. He expects the region’s first stores to open next summer, aiming for seven or eight by the end of 2026. He has a more ambitious long-term vision with a goal of ultimately operating 300 units across the country.

Franchisees include hotel owners, tech executives and experienced multi-unit operators, almost all with ties to Japanese culture or long-standing affection for the brand — several are former regulars at the original San Francisco shops.

Kanematsu’s path to retail real estate started with a restaurant job in college, where he was pursuing a career as a software engineer.

After arriving in the U.S., he was stunned to find that the onigiri every Japanese commuter relies on was essentially nonexistent in the States. It wasn’t for lack of demand, he realized, but because U.S. health codes and labor structures made it difficult to replicate the convenience-store production model he knew from Japan.

So, he reverse-engineered the product. First came home-kitchen experiments, then a colorful early menu designed to appeal to Americans wary of seaweed, then pop-ups, festivals, food carts and several painful misfires — including a music festival where Onigilly made 4,000 rice balls and sold only a fraction.

The turning point came when he began treating onigiri like Subway sandwiches: a made-to-order, small-footprint, no-kitchen item built through assembly rather than cooking. That mindset fit his background as a systems developer.

“I approached it like building software,” he said. “Anything we can automate, we automate. Anything that needs a human touch, we keep.”

Onigilly isn't the only Japanese brand expanding in the U.S. Tokyo-based Lemonade by Lemonica will open its first store in San Francisco. And Japan-based Round One has leased a high-end space in Los Angeles for its new upscale food hall concept ahead of a national rollout.

And Asian concepts from Korean fried chicken to Taiwanese tea "are resonating with both mall owners and consumers because they offer differentiation at a time when food courts were oversaturated with the same national chains," Larson said.

Onigilly’s format gives owners a way to freshen a food court or mall wing without sacrificing leasable square footage to a full kitchen. The food's portability and pricing resemble accessible fast-casual brands while offering differentiation that landlords value, Kanematsu said.

The broader quick-service category has also leaned into food that diners can carry while eating as more customers shift from sit-down meals to grazing between errands.

Onigiri fits the “snackification” trend that’s remaking food courts and airport concourses, he said.