Financing

A tiny Southern California ramen concept makes its public market debut

The parent of eight-unit Yoshiharu Ramen goes public on the Nasdaq Capital Market under the ticker symbol "YOSH."
Yoshiharu
Yoshiharu Ramen, a tiny California chain, made its public debut on Friday. / Photograph courtesy of Yoshiharu.

A soon-to-be nine-unit ramen chain based in Southern California made its debut 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 priced at $4 per share but began trading at $5.20 under the ticker symbol “YOSH.”

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

Known for rich pork-broth-based tonkotsu, ramen is at the core of the menu, but Yoshiharu also offers sushi, bento box meals, 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 filings with the Securities and Exchange Commission, the chain’s revenue grew to $4.4 million for the nine months ended Sept. 30, 2021, up from $1.9 million for the same period in 2020—though Yoshiharu reported a net loss of $42,968 for those nine months in 2021.

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

But the filing also indicated the chain was recovering from the hit of the pandemic. The company expected to be operating 14 corporate locations before the calendar year-end, and the company sees potential to grow to 250 units domestically, and 750 restaurants internationally.

A franchise program is expected to be launched before the end of 2022, and the company is also positioning for a potential instant ramen goods line in grocery stores, or even possibly small-format kiosks in stores offering a limited menu.

Yoshiharu is not the first relatively small Japanese chain to dive into the public markets.

Kura Sushi USA had success with an IPO in 2019 when it had only 22 units, though it is a subsidiary of a 500-unit Japan-based chain. For the third quarter ended May 31, Kura Sushi USA had 37 units and reported $38 million in sales.

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