Yossix Holdings Co., Ltd.

There is no guarantee that properties matching the Group's needs can always be secured, and even if secured, the planned store revenue may not be achieved. If new store openings cannot be executed as planned, this will affect the Group's overall growth strategy and performance. The Company is broadly gathering information from real estate agents, business partner banks, liquor retailers, and others in order to secure properties.

If the performance of "Yataizushi," the mainstay of earnings, falters and its expansion slows, this will directly impact the Group's performance. In the restaurant industry, no business format maintains strong performance permanently, and development of new formats responsive to changes in customer preferences and trends is necessary; however, there is a risk that such development may not proceed as expected. If the establishment of new earnings pillars is delayed, mid- to long-term growth potential could decline.

Labor shortages have become chronic in the restaurant industry, and hiring capable, experienced personnel is difficult amid competition with other companies. The Group operates its stores mainly with locally hired employees and considers human resources to be its most important management resource; however, there is a possibility that training through on-the-job training and various meetings may not bring staff to the required level. If recruitment and training of personnel do not proceed as planned, this may affect performance through a decline in service quality.

The Company is subject to a wide range of legal regulations, including the Food Sanitation Act, the Adult Entertainment Businesses Act (Fueiho), the Labor Standards Act, the Fire Service Act, and the Act against Unjustifiable Premiums and Misleading Representations. In the event of a food poisoning incident, significant impacts such as revocation of business licenses, business suspension, and damages claims may occur. Stores operating late at night are subject to regulation under the Adult Entertainment Businesses Act, and there is a risk that business suspension or other measures may be ordered in the event of a legal violation. Although measures such as thorough hygiene management, internal audits, and awareness activities are being implemented, serious compliance issues or costs incurred in responding to legal amendments may affect performance.

The restaurant industry's market size is maturing and trending toward contraction due to factors such as the consumption slump, the expansion of the ready-to-eat (nakashoku) market, and population decline. Barriers to entry are low, and numerous stores—from major chains to individually run establishments—compete in the market, intensifying competition further. The Company is working to strengthen customer traffic through improvements in food quality and customer service and the development of new business formats; however, if customer traffic declines significantly, this may affect performance.

Representative Director Masanari Yoshioka has played a key role since the company's founding in formulating management policy, developing business formats, and shaping financial strategy, resulting in a high degree of dependence on him. The Company is working to reduce this dependence by delegating authority through job authority regulations and division-of-duties regulations; however, if he becomes unable to perform his duties during the transition period, this may affect the Group's performance.

If store profitability declines and results deviate significantly from the business plan budget, resulting in two consecutive fiscal years of operating losses, an impairment loss may be recognized. The Company applies accounting standards for impairment of fixed assets, and the recognition of an impairment loss would have a direct impact on its financial position and performance. In particular, if the balance of fixed assets expands due to an increase in new store openings, the impact could become larger.

The majority of the Company's stores are leased properties, resulting in a structure in which leasehold and guarantee deposits account for a high proportion of total assets. There is a risk that deterioration in the lessor's business condition could hinder continued operations, and a risk that leasehold and guarantee deposits may not be returned upon store closure or early termination of a lease. In addition, a rise in rent levels due to economic fluctuations could increase costs when opening new stores or renewing leases for existing stores, which may affect the Company's financial position and performance.

The restaurant industry makes extensive use of imported food ingredients, and there is a risk that a weaker yen will raise the procurement cost of such imported ingredients. Amid a pronounced trend toward yen depreciation driven by the Bank of Japan's monetary easing, numerous price increase requests from suppliers may occur. If the yen's depreciation continues, this may affect the Group's performance through a rise in the cost ratio.

As part of its growth strategy, the Company is pursuing business expansion through M&A, aiming for synergies with existing businesses and optimization of its business portfolio; however, there is a possibility that the expected earnings and effects may not be realized. Although the Company conducts regular monitoring and review of investment value even after execution, a deterioration in market economic conditions or a decline in the corporate value of an investee company may affect its business results and financial position.