TORIDOLL Holdings Corporation

Competition in the foodservice industry is intensifying due to expanding takeout and delivery demand and rapid changes in consumer behavior. If market changes exceed the Company's expectations or the Company is unable to demonstrate competitive advantages, its business performance may be affected. As countermeasures, the Company is promoting initiatives responsive to changes in dining styles, such as the introduction of mobile ordering and cashless payments and the establishment of dedicated takeout counters.

There is a risk that procurement prices for key raw materials such as wheat, vegetables, meat, and oils and fats may rise due to reduced production caused by abnormal weather or fluctuations in crude oil and grain markets stemming from global conditions, making stable procurement difficult. Rising raw material costs directly squeeze profitability and may affect business performance. The Company strives to diversify risk through purchasing from multiple production areas and vendors, and works to optimize procurement prices.

Marugame Seimen Co., Ltd. accounted for approximately 49% of consolidated revenue in FY2026 (ending March 2026), and the impact of its business performance on the Company Group as a whole is extremely significant. If Marugame Seimen fails to grow as expected due to changes in customer preferences, a decline in brand strength, or other factors, this may have a material impact on the Group's overall performance. The Company is promoting diversification of revenue sources through the development of new business formats and the expansion of the Overseas Business.

The Company Group does not amortize goodwill or intangible assets with indefinite useful lives, and conducts impairment testing every fiscal period or when indications of impairment arise. If an impairment loss is recognized due to deterioration in the business environment or other factors, this may have a material impact on operating results and financial position. The Company strives to mitigate this risk through regular monitoring of indications and the implementation of improvement measures as appropriate.

Large fluctuations in foreign exchange rates, arising from investments and loans to overseas group companies and the yen conversion of revenue and expenses denominated in local currencies, may generate foreign exchange gains or losses and affect consolidated business performance. This impact may become more pronounced as the Overseas Business expands. When demand for foreign-currency-denominated investment and loan funds can be clearly anticipated, the Company works to reduce risk by implementing hedging measures such as forward exchange contracts.

Store operations and raw material procurement rely on cloud-based information systems, and if information leakage, tampering, or system outages occur due to cyberattacks, terminal failures, software malfunctions, or other causes, this could disrupt business operations, create litigation risk, and undermine social trust. The Company implements a wide range of measures, including the introduction of a zero-trust security model, the establishment of ISMS-PIMS, and employee training through e-learning.

For the Company Group, which advocates for "creating excitement through the human touch," securing and developing human resources is a critical management challenge, and if this does not proceed as planned, it may affect business performance and store opening plans. There is a risk that intensifying competition in the labor market will make it difficult to acquire and retain talented personnel. The Company is working to strengthen corporate branding, promote a merit-based system, and develop succession plans through talent reviews, among other initiatives.

Country risks such as political instability, changes in laws and regulations, and differences in business practices in the countries where overseas subsidiaries, joint ventures, and affiliated companies operate may make it difficult to carry out planned business expansion. There is also a risk that royalty income may decline due to deteriorating or declining performance among franchisee companies. The Company works to reduce this risk by gathering information from local business partners and local employees who are well-versed in each market.

If a food hygiene issue occurs, in addition to direct losses from the suspension of operations at affected stores, it could lead to a decline in brand image and loss of social trust, potentially having a material impact on business performance. The Company is strengthening countermeasures through inspections of compliance with quality and hygiene control standards at domestic and overseas supplier factories, hygiene inspections by external specialists, and thorough enforcement of internal standards.

The increasing frequency of abnormal weather due to climate change may affect business performance through disruptions to stable raw material procurement, fluctuations in procurement prices, and damage to stores, while large-scale earthquakes, wind and flood damage, and the spread of emerging infectious diseases also pose risks that could make it difficult to continue operations. The Company supports the recommendations of the TCFD and has set CO2 reduction targets, while also establishing an initial response framework for emergencies through the formulation of business continuity plans, disaster drills, and the introduction of an employee safety confirmation system.