Jin Jiang Hotels Plans to Sell a 9.815% Stake in Shanghai Yoshinoya

This is an English adaptation of a FoodBud historical article originally published on September 3, 2022.

Jin Jiang Hotels recently planned to transfer a 9.815% equity stake in Shanghai Yoshinoya Fast Food Co., Ltd. for RMB 8.2173 million.

Shanghai Yoshinoya was established in June 2002 with registered capital of US$12.3 million. Its legal representative is Zhang Xiaoqiang, chairman of listed company Jin Jiang Hotels.

Before the planned transfer, the shareholding structure was:

• Yoshinoya (China) Investment Co., Ltd.: 57.185%
• Jin Jiang Hotels: 42.815%

In Jin Jiang Hotels' interim report, the company said Shanghai Yoshinoya had posted consecutive losses, and Jin Jiang Hotels had written down its long-term equity investment in Shanghai Yoshinoya to zero.

Franchise Territory and Store Base

Under a franchise contract renewal signed on June 2, 2012 between Yoshinoya International Co., Ltd. and Shanghai Yoshinoya Catering Co., Ltd., Shanghai Yoshinoya Catering received the right to use the Yoshinoya trademarks, related technology, and technical information in Shanghai, Zhejiang, and Jiangsu.

The agreement required payment of an initial fee, ongoing fees equal to 4% of monthly sales at each franchised store, and store-opening license fees. The franchise term was 10 years.

A later Shanghai Yoshinoya Fast Food Co., Ltd. franchise contract, effective December 1, 2015, set the operating term through November 30, 2025, with the possibility of extension.

In practice, although Shanghai Yoshinoya held opening rights across Shanghai, Zhejiang, and Jiangsu, Narrow Door Foodservice Eye data showed Yoshinoya had only 16 stores in those three areas, all in Shanghai.

Financial Performance

In 2021, Shanghai Yoshinoya recorded:

• Revenue: RMB 45.21 million
• Net loss: RMB 990,000
• Total liabilities: RMB 19.1468 million

In the first half of 2022, it recorded:

• Revenue: RMB 8.6357 million
• Net loss: RMB 5.3494 million
• Total liabilities: RMB 22.8156 million

As of December 31, 2021, Shanghai Yoshinoya had total assets of RMB 15.143 million and negative net assets of RMB 4.0234 million. The appraised value corresponding to the equity stake being transferred was negative RMB 324,500.

Note: equity-transfer and franchise-term figures are historical, based on information reported in September 2022.