A small Southern California ramen concept makes its public market debut

Yoshiharu Ramen, a small California chain, made its public debut on Friday. / Photo courtesy of Yoshiharu.

A future nine-unit ramen chain based in Southern California debuted on the Nasdaq Capital Market on Friday, hoping to raise more than $12 million for expansion with an initial public offering.

Yoshiharu Global Co. offered 2.9 million shares of Class A common stock at $4 per share, but began trading at $5.20 under the symbol “YOSH”.

Based in Buena Park, California, Yoshiharu was founded by James Chae, now CEO, in 2016 and the concept has spread mostly around and outside of Los Angeles with eight units and one in development.

Known for its rich pork broth-based tonkotsu, ramen is at the heart of the menu, but Yoshiharu also offers sushi, bento dishes, dumplings and other dishes that appeal to what the company describes as a growing appetite for Japanese cuisine.

The IPO was first announced in January. According to documents filed with the Securities and Exchange Commission, the channel’s revenue increased to $4.4 million for the nine months ended Sept. 30, 2021, from $1.9 million for the same period in 2020. although Yoshiharu reported a net loss of $42,968 for those nine months. months in 2021.

During the S1 filing in January, the company said it continued to experience negative cash flow from operations and had significant accumulated debt ($2.6 million as of September 30, 2021), which raised doubts about the company’s ability to continue.

But the filing also said the channel was recovering from the pandemic hit. The company planned to operate 14 corporate locations before the end of the calendar year, and the company sees potential for growth to 250 units domestically and 750 restaurants internationally.

A franchise program is expected to launch before the end of 2022, and the company is also positioning itself for a possible line of instant ramen products in grocery stores, possibly even small-format kiosks in stores with a limited menu.

Yoshiharu isn’t the first relatively small Japanese chain to dive into public markets.

Kura Sushi USA successfully went public in 2019 when it had only 22 units, despite being a subsidiary of a 500-unit chain based in Japan. For the third quarter ended May 31, Kura Sushi USA had 37 units and revenue of $38 million.

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