In 1985, The Cannon Group, an independent film company with a streak of successful action films, were looking to produce an action film starring Chuck Norris called American Ninja (1985), which Norris turned down. Shortly after, Cannon went on a worldwide search to find who would play Private Joe Armstrong the American ninja. Over 400 candidates went on to audition for the part. Producer and Owner of Cannon Menahem Golan and director Sam Firstenberg thought he was the obvious choice for the part. Golan even went on to say that he would be the next James Dean. It was a surprise for Dudikoff, who at the time was mostly known for supporting roles in comedies. It was Dudikoff's first collaboration with actor Steve James (1952–1993) who was hired to play the partner of the American ninja, a role he maintained for the first three installments. On a $1 million budget it went on to gross over $10 million domestically in the US and did extremely well in foreign markets. This success would establish the start of the American Ninja film franchise, with Dudikoff becoming a regular action star for The Cannon Group alongside Chuck Norris, Charles Bronson, Sho Kosugi, and later on Jean-Claude Van Damme. For the rest of the 1980s, Dudikoff would continue to star in Cannon Group action film projects.