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| March 8, 2004 |
| To Whom It May Concern, |
Company Name:
Name of Representative:
Inquiries:
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Company Name: BB Net Corp.
Eiji Tanaka,
President & CEO
(Stock Code: 2318)
Yasuhisa Okubata,
General Manager,
Corporate Planning Office
(TEL: 06-4797-1102)
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| BB Net corp. resolved at the meeting of the Board of Directors held on March 8, 2004 to acquire operations associated with the restaurant franchise business (which involves the development of restaurant franchises, hereinafter referred to as “Franchise Chain (FC) business”) from Universal Food Co., Ltd. BB Net corp. plans to sign a business transfer agreement with Universal Food Co., Ltd. in a few days. Universal Food Co., Ltd., a subsidiary of Itochu Corporation, is headquartered at 2-5-1 Kita-Aoyama, Minato-ku, Tokyo, and is headed by President Ichiro Kurata. Please be informed of the following details. |
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| 1. Backgrounds of Business Transfer |
BB Net Corp. is a company which promotes “Shop Support”, a comprehensive support scheme targeting small- and medium-sized enterprises. To realize the “Shop Support” scheme, we have established “Hanjo Nets”, which are B2B portal sites for confectionary & bakery sectors, restaurants, etc., and we distribute useful industry and management-related information as “Front Services”. We also offer a wide range of services designed to meet the members’ common needs such as the sale of food ingredients, planning, designing and execution management of stores, and insurance and lease arrangements as “Back Services”.
As part of “Back Services”, we had been developing plans for an FC business targeting “Hanjo Net” members. We decided to accept the aforementioned business transfer, considering that Universal Food Co., Ltd. already owned the business and that it is expected to generate diverse synergy effects when combined with our business, beyond the scope of developing franchises as described below.
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2. Profile of FC Business of Universal Food Co., Ltd. |
| The FC business, within Universal Food Co., Ltd., offers services for developing franchises owned by the franchisers based on alliances therewith. The following franchises are on the development list as at the time of business transfer.
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| Franchisers |
Franchised Shops |
| Saint-Marc Co., Ltd. |
Hakodate Ichiba, Saint-Marc Cafe |
| Freshness Burger |
Gohandokoro Ohachi, Freshness Burger |
| Kiwa Corp. |
Wan Zhu Ji, Benitora gyozabo |
| Omuraisutei Co., Ltd. |
Omuraisutei |
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In addition to the above, Universal Food Co., Ltd. also runs the “FC Platform Business”, which involves assembling companies which are highly motivated to run restaurants as franchisees and arranging business introduction sessions by the franchisers regularly.
It also issues a monthly magazine titled “Win’s” to attract potential franchisees and provide information on the FC Platform Business, and advertises in the magazine.
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| 3. Implementation of New Business based on Synergy Effects when Combined with BB Net’s Business |
| 1) Membership Exceeding 12,000 Companies |
| The FC business of Universal Food Co., Ltd. has more than 4,000 client companies, and is engaged in developing franchise chains. In addition to those, we have more than 8,000 member companies in total, under “Kashi-Pan Hanjo Net” operated directly by BB Net Corp. and four restaurant-oriented “Hanjo Nets” by BB Net Group. Our members, who either run a confectionery & bakery business or a small/medium-sized restaurant, form a key franchisee market. Once the operations associated with the FC business are transferred to BB Net Group (hereinafter referred to as “the New Business”), we will be able to launch a franchise development business targeting 12,000 companies, which is the total number of members of both sides. |
| 2) Differentiation from Existing Franchise Development Business |
| When expanding franchises under the New Business, our activities will not be limited to the development of franchises; we will also actively provide contacts between motivated members and franchisers through the “FC Platform Business”, etc. to accelerate the conclusion of franchise agreements. BB Net Group will actually run restaurants as a franchisee to valuate the profitability and the marketability of the franchise before expanding it. We will differentiate ourselves from existing franchise development through such efforts and by other means. |
| 3) Support by BB Restaurant Service Corp |
| Our subsidiary, BB Restaurant Service Corp., runs its own Taiwanese restaurant chain “Ah Lee Shan” and some franchisee restaurants, and has extensive administrative functions and a central kitchen to perform the operations. The implementation of the New Business will lead to the expansion of administration and therefore give rise to the need to improve such functions. Accordingly, the administrative headquarters of BB Restaurant Service Corp. will take on the headquarter functions for expanding administrative operations especially in Kansai, and depending on the situation, the central kitchen of BB Restaurant Service Corp. will process, manufacture and deliver the food ingredients. BB Restaurant Service Corp. will provide a broad support framework in such a manner. |
| 4) Support by Cube Planning Corp. |
| Cube Planning Corp. is a company specializing in the renovation of stores within the BB Net Group. As part of “Back Services” in the “Shop Support” scheme, it is engaged in the planning, designing and construction management of stores. As the implementation of the New Business will create new demand for refurbishment and makeover of stores, Cube Planning Corp. will perform planning, designing and construction management of stores from the viewpoint of franchisers and franchisees in order to make them profitable as a business, rather than from the standpoint of construction firms, and will propose store renovations that will help raise profits for franchisers and franchisees. These proposals are deemed to serve as a key differentiating factor for expanding franchises. |
| 5) Support by Cowbin Corp. |
Cowbin Corp. is half-owned by BB Net corp. and belongs to the BB Net Group. The company operates the franchise of “\100 Chilled Deliveries”, which involves chilled daily delivery at a low price. Food ingredients produced by the central kitchen of BB Restaurant Service Corp. will be delivered by the low-price chilled delivery service, to reduce the running costs of franchisee restaurants. Also, proposals will be made to franchisers to adopt the low-price delivery service.
As the “\100 Chilled Deliveries” service is based on a “double cropping” franchise model, which can generate additional transport revenues without adding new facilities or vehicles, it is deemed to help expand Cowbin as well. |
| 6) Development of New Business by BB Net Group |
| In addition to the franchises referred to in 2. above, new types of FCs to be developed or implemented by BB Net Group. include the planned packaging or licensing sales of a number of types associated with Taiwanese restaurant chain “Ah Lee Shan”, which is operated by BB Restaurant Service Corp. We also plan to expand Cowbin, which operates the aforementioned “\100 Chilled Deliveries”. |
| 7) Food Ingredients Supplied by Universal Food Co., Ltd. |
| When restaurant franchisers under the New Business, need to have food ingredients supplied, we can refer the restaurants to Universal Food Co., Ltd. or Itochu Corp. With an agreement Universal Food Co., Ltd. or Itochu Corp, the restaurants will be able to enjoy their rich product line and their extensive supply system. We expect this is a differentiation from other franchise development businesses in this aspect as well. |
| 8) Expansion Overseas |
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We presume there are regions in which we can implement the new FCs overseas. We will focus especially on Shanghai and Beijing in China, in exporting the FCs overseas.
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| 4. Payment for Business Transfer |
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150 million yen.
The above amount is paid for the goodwill of the FC business of Universal Food Co., Ltd.
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| 5. Schedule |
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March 20, 2004: Conclusion of business transfer agreement
March 27, 2004: Business transfer date
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| 6. Future Prospects |
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The impact of the business transfer on the performance of BB Net Group will be announced as soon as the prospects become cle
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