Reform of the earnings structure of the existing directly operated store model

「To address this issue, the responsible officers and the head of the sales division are entering stores directly to provide guidance for improvement, while the head-office departments are working together to carry out thorough cleaning at each store, review interior decoration and improve operations in phases.」

「During the fiscal year, we focused on converting stores to ハッケン酒場, our core growth format, and converted 19 stores in total, including both company-operated and franchised stores.」

「At existing stores, primarily ハッケン酒場, we converted and renovated 11 stores. Together with an increase in younger customers in addition to our traditional customer base, this resulted in average sales after the initiatives remaining at 120% or more of the prior-year level.」

「In May, we opened 大阪やきそばセンター西中島店 (Osaka); in July, やきとりええねん西九条店 (Osaka); and in September, やきとりええねん谷町四丁目店 (Osaka). To accelerate format changes at existing stores, 八剣伝豪徳寺駅前店 (Tokyo), 八剣伝大町東店 (Hiroshima) and 酔虎伝大元店 were converted to ハッケン酒場; 餃子食堂マルケン与野駅前店 (Saitama) and 餃子食堂マルケン武庫之荘店 (Hyogo) were converted to 大衆餃子酒場ニューマルケン; and 餃子食堂マルケン天七店 (Osaka) was converted to やきとりええねん.」

「④ “Improving productivity” ... Stores that introduced a system enabling customers to place mobile orders using digital tools totaled 35 during the cumulative third quarter period.」

「During this fiscal year, we are streamlining our company-operated stores and transferring or leasing stores with earnings potential to high-performing employees seeking independence. As a means of enabling independence, we newly established the Management Development Support Program and completed the transfer or leasing of 16 stores during the cumulative second-quarter period.」

「During this fiscal year, we will further streamline our company-operated stores and transfer or lease stores with earnings potential to high-performing employees seeking independence. As a means of enabling independence, we newly established the Management Development Support Program, under which participants operate a store while learning management and become independent within a maximum of 3 years.」

「Under the slogan “Deliver genuine quality and deliciousness properly,” we will pursue product deliciousness, enhance the added value of the products we offer, and secure gross profit by increasing average customer spending. We will also improve earnings power by optimizing delivery costs through a review of our logistics system and improving productivity through the introduction of a mobile ordering system.」

「Under the keywords “people, deliciousness, and enjoyment” for sales activities, with “change” added to them, the company revised its store prices through sales initiatives including the launch of high-quality menu items in its autumn 2022 menu revision, and recorded an increase in average customer spending.」

「The company launched the Hakkenden Rebuilding Project in the previous fiscal year and began selling all yakitori items for ¥100 before tax when it revised the menu in March 2022. While fully promoting Hakkenden’s signature charcoal-grilled menu items, it is working to enhance the value of the format by promoting the addition of Machi no Yakitori-ya-san outlets as an approach to the prepared-meals market.」

「We believe that rebuilding and enhancing the value of the existing company-operated store model is necessary. To rebuild the brand of Hakkenden, our main format, we are advancing 3 phases: 1. measures to improve QSCA, 2. revising yakitori prices, and 3. introducing high-quality menu items. At the same time, we will promote the addition of Machi no Yakitori-ya-san outlets as an approach to the prepared-meals market, with the aim of encouraging repeat visits from existing customers and visits from new customers.」

「As a new sales initiative, the company added “Machi no Yakitori-ya-san” outlets to Hakkenden stores to enter the prepared-meals market and expand the business in response to takeaway demand during the COVID-19 pandemic. In addition, to transform the business into one less dependent on alcohol sales, it opened Kusojiji Saigo no Hitofuri Takatsuki in June under a franchise agreement with UNCHI株式会社, entering the ramen business as a new area of development.」

「As a primary restructuring model, the company added “Machi no Yakitori-ya-san,” a takeaway specialty store with a full-scale takeaway counter, to existing company-operated stores. In addition, at stores without a Machi no Yakitori-ya-san outlet, the company will seek to improve earnings power by expanding virtual restaurants, which sell dishes that can be ordered only online separately from the physical restaurant, in addition to its regular delivery service.」

「The company focused on strengthening the new Gyoza Shokudo Maruken format and, during the third quarter, changed the formats of 5 company-operated stores from existing formats」

「Regarding company-operated store openings, the company changed the formats of 3 stores to Gyoza Shokudo Maruken.」

「The company changed the formats of 3 stores to Hakken Sakaba, 3 stores to Gyoza Shokudo Maruken, and 2 stores to Yakisoba Center, among others, and carried out format changes and renovations at 20 stores in total. In addition, it opened 8 new stores in total, including 5 Hakken Sakaba stores, 1 Yakisoba Center store, and 1 Gyoza Shokudo Maruken store.」

「To promote format changes centered on Hakken Sakaba under “improving existing stores,” the company changed the formats of 9 stores in total: 3 Hakken Sakaba stores, 3 Gyoza Shokudo Maruken stores, 2 Yakisoba Center stores, and 1 GOTTO Sakaba store. It also renovated 7 stores through concept renewal from Hakkenden to Hakken Sakaba, 3 existing stores through refresh renovations, and 1 other store through concept renewal, for a total of 11 renovated stores.」

「To promote format changes centered on Hakken Sakaba as a measure to achieve sustainable growth and enhance corporate value over the medium to long term, the company changed the formats of 9 stores in total: 3 Hakken Sakaba stores, 3 Gyoza Shokudo Maruken stores, 2 Yakisoba Center stores, and 1 GOTTO Sakaba store. It also carried out concept renewal renovations at 7 stores, changing them from Hakkenden to Hakken Sakaba, and refresh renovations at 3 existing stores, for a total of 10 renovated stores.」

「Under the annual slogan “Putting sincerity first so customers will visit us,” the company implemented format changes at 4 stores centered on Hakken Sakaba as a measure to achieve sustainable growth and enhance corporate value over the medium to long term, thereby advancing its efforts to improve existing stores.」

「Under “improving existing stores,” the company will promote format changes centered on Hakken Sakaba and strengthen operation of the Meister system, which has been in place since the previous fiscal year to improve cooking standards.」

「As part of “improvements and reforms aimed at revitalizing existing stores,” the company opened Sumibi Yakitori Hakken Sakaba in Nishinari-ku, Osaka, Kyotanabe, and Akashi, specializing in “tare-kawa,” aged chicken skin grilled with sauce, and opened Hakkenden Shokudo in Matsudo, Chiba Prefecture, and Sakai, with an expanded food menu including oyakodon from a yakitori restaurant.」

「As part of “improvements and reforms aimed at revitalizing existing stores,” the company sought to open stores suited to the customer base at each location, opening Kushiyaki Sakaba Kokoro Hakkenden in Yodogawa-ku, Osaka, specializing in carefully sourced fresh chicken, and Sumibi Yakitori Hakken Sakaba in Kobe, Hyogo Prefecture, and Tsurumi-ku, Osaka, specializing in “tare-kawa,” aged chicken skin grilled with sauce.」

「As part of “improvements and reforms aimed at revitalizing existing stores,” we opened Kokoro Hakkenden in Saitama, Saitama Prefecture, featuring fresh chicken sourced from carefully selected production areas; Hakken Sakaba in Nishinomiya, Hyogo Prefecture, specializing in “tare-kawa,” aged chicken skin grilled with sauce; and Hakkenden Shokudo in Osakasayama, Osaka Prefecture, and Hiroshima, with an expanded food menu including oyakodon from a yakitori restaurant.」

「Under these circumstances, we worked to strengthen the earnings and sales capabilities of existing stores and achieved certain results, including securing same-store sales at 100% or more of the previous year’s level, but were affected by factors including the failure to meet the store-opening plan and a decline in the number of stores, including franchisee-operated stores.」

「As part of “improvements through revitalizing existing stores,” Suikoden held the “Taste Exploration 13: Tohoku Fair,” featuring delicious foods from Aomori, Iwate, and Akita; Hakkenden held a fair featuring Banshu Hyakunodori chicken as part of “Japan’s Delicious Foods Journey”; and Ishinden held the “Michinoku” fair featuring delicious foods from Tohoku, including Akita’s specialty kiritanpo hot pot.」

「As part of “improvements through revitalizing existing stores,” Suikoden held a fair to determine the grand-prize winners from 8 popular dishes selected from the first through tenth installments of its “Taste Exploration” series, as well as a fair featuring aged mackerel from specialty restaurant SABAR and Sakoshi oysters from the Banshu-Nada area. Hakkenden held a “Japan’s Delicious Foods Journey” fair, an Okinawa fair, and a fair in collaboration with SABAR. Ishinden held an Okinawa fair and a Mexican fair featuring popular Mexican dishes.」

「Through the practice of our management philosophy, “Creating a clinic for the heart,” we have made the medium-term management plan, beginning with the fiscal year ended March 2017, a pillar of our management strategy and have worked to reform the earnings structure of the existing company-operated store model and strengthen store sales capabilities and the brands of our various formats.」

「In addition to reforming the earnings structure of existing company-operated stores through scientific analysis methods to create model stores for franchisees, the company sought to strengthen sales capabilities and the brand strength of its various formats,」

「As part of “improvements through revitalizing existing stores,” the company held a Kumamoto Reconstruction Support Fair at stores across its various formats.」

「As part of “improvements through revitalizing existing stores,” Suikoden held a “Tokai Journey” fair featuring local Tokai cuisine loved by residents; Hakkenden held a “Japan’s Delicious Foods Journey” fair using bluefin tuna; and Ishinden held Okinawa and Thai fairs, including a teppan taco rice dish, familiar in Okinawa and developed from tacos. In August, all three brands held a joint “Senbero Festival” fair.」

「We focused primarily on reviewing the earnings structure of existing stores, including measures to expand gross profit and reviews of operations at unprofitable stores for which impairment losses were recognized in the previous fiscal year’s results.」

「Review of the existing company-operated store model (earnings structure reform) – Rebuilding an earnings structure suitable for model stores – Implementing resource allocation with clear priorities」