ICHIBANYA CO.,LTD.

While the food service market continues to show flat overall size, competition is intensifying not only among restaurants but also across business formats such as convenience stores and supermarkets. If the Group is unable to provide menus and high value-added services that meet customer needs, this could lead to a decline in net sales. The securities report does not describe specific countermeasures.

If a food poisoning incident occurs at a store, or if a hygiene problem arises at a factory or distribution center, or if a material error occurs in food allergen or country-of-origin labeling, this could damage the company's image and result in the payment of damages. In the food service industry, food safety is fundamental to customer trust, and a single incident carries the risk of causing widespread damage to sales and brand value. The securities report does not describe specific countermeasures.

If a situation arises in which the safety of key ingredients cannot be assured, or if supply volume declines due to producer or market trends, the Group may be forced to revise or reduce menus, potentially leading to a decrease in store sales. There is also a risk that profitability could be squeezed by rising procurement prices. Given the structural high dependence on specific ingredients as a curry specialty chain, the impact of procurement risk is likely to directly affect business performance.

If a large-scale earthquake, typhoon, or other natural disaster or accident disrupts factory operations or deliveries to stores, the supply of ingredients and other materials may be halted, making it difficult to continue store operations. If factories and distribution centers are concentrated in specific locations, damage to a single site carries the risk of affecting store operations over a wide area. The securities report does not describe specific BCP countermeasures.

The Group is subject to a wide range of legal regulations related to store operations and factory manufacturing, including accounting and tax, labor, food hygiene, and environmental laws. If these legal regulations change, new costs may arise in response, potentially affecting business results. In particular, revisions to labor-related regulations (such as minimum wage increases) and food hygiene-related regulations tend to impose a large additional cost burden in the food service industry.

The majority of the Group's stores are leased properties, and the Group pays security deposits and guarantee deposits to landlords upon opening stores. If these deposits become unrecoverable due to landlord bankruptcy or other reasons, this could affect the Group's business results. As a multi-store chain with a large number of leased properties, the cumulative amount at risk of non-recovery increases in proportion to the number of leased stores.

If the value of fixed assets held by the Group declines or cash flows deteriorate, impairment processing may become necessary, potentially affecting business results. In periods of increasing unprofitable stores or worsening performance, impairment losses on fixed assets such as store equipment and interiors carry the risk of temporarily and significantly depressing results. The securities report does not describe specific countermeasures.

The Group operates Curry House CoCo Ichibanya overseas, primarily in Asia, but political and economic conditions in each country or region could make it difficult to continue store operations. There is a risk that political instability, regulatory changes, and foreign exchange fluctuations specific to emerging markets and Asian markets could combine to affect business results. The securities report does not describe specific risk hedging measures.

While recruiting and training excellent personnel is considered important for sustained medium- to long-term growth, if recruitment and training do not proceed as planned or if mass resignations occur, this could hinder business development and affect business results. As labor shortages become more severe across the food service industry as a whole, securing personnel—which directly affects the maintenance and improvement of store operation quality—has become a particularly important risk factor.

If a novel infectious disease or similar illness spreads widely across the world, store operations and factory operations could become difficult, and the global economy could slow significantly due to declines in personal consumption and stagnation in production and logistics functions. The food service industry is particularly susceptible to the direct impact of voluntary restrictions on going out and shortened operating hours during the spread of infectious diseases, posing a risk of widespread sales decline for the Group, which operates multiple stores both domestically and overseas. The securities report does not describe specific countermeasures.