Basic Management Policies

The group’s basic management policy is supported by two business missions. The first mission is to continue generating valuable products and services (businesses) as the “New Business Creator” to help small to medium sized businesses continue growing by leveraging new business opportunities presented by us and acquiring key management know-how. Second, as the “Human Value Innovator”, we support the development of human resources among small business owners to gain management abilities to create a successful business.

Under the basic management policies, the company is committed to continuously creating and returning higher values to the stakeholders (customers, shareholders, vendors, employees and our society).

Management Strategy

1. Presenting business opportunities to small businesses through alliances with financial institutions nationwide.

New business opportunities are offered to a membership network of small businesses created with local and regional banks.

2. Selecting business concepts suitable for small businesses to succeed

We select successful businesses that target the “aging society” and “matured industries with no monopolizing players” The business must also have high growth potential to meet the ever increasing social needs of Japan.

3. Subsidiary franchise headquarters will create the No. 1 chain in that particular industry.

Franchise concepts are sought globally through the company’s R&D efforts. Subsidiary headquarters will launch 1 to 2 new brands each year to create the industry’s No. 1 chain within 3 to 5 years.

Long-Term Management Strategy

1. Expansion of the Network

To further strengthen the relationship with financial institutions which provides a solid foundation for the business model, the company is focusing on reinforcement of services toward financial institutions in tandem with the government initiatives of the “Relationship Banking”. The services include a business matching service using our long-standing business referral service, a sales support program to achieve sales growth for the financial institutions through assisting principal business of their local client companies and a consulting service for banks’ tradeshow planning utilizing our know-how built through a success of the Tokyo Business Summit.

The solid network of small and medium sized businesses created through alliances with financial institutions nationwide is and will be our essential core for the future growth of the group. It is of paramount importance to ensure a continued expansion of the network.

2. Sound Operations to Create New Business Opportunities and to Build Chains by Our Subsidiary Franchise Headquarters

Our growth drives will continue coming from expansion of the franchise businesses as the “New Business Creator” through research and development of feasible business concepts from around the world, creating franchise packages and presenting new business opportunities to our small business membership. To achieve fast growth of a franchise chain we develop, the company will acquire a license for franchising the business by paying a license fee to its owner, and set up a 100% owned subsidiary within the group that will operate as the franchise headquarters to sell the franchise.

Strategically, we have selected the 4 industry segments in Japan through in-depth study and analysis of constant changes in small business environments and in consumers’ trends. Those industries are foodservice, education, retails for aging population and health/personal care. A franchise package will be designed to assist principal business of the participating Business Link Partners producing synergies for further growth of the company with low initial investments under US$200,000.

The company has introduced the “7 Habits for Juniors” and “3 Basic Skills” brands in the education segment, “Takumi Honpo” in the retail service segment, and “Curves” in the health/personal care segment. Recently, a new franchise brand known as “Missionary” was launched. We are planning to introduce 1 to 2 new franchise brands every year with our strong commitment to make all brands the industry’s No. 1 chain.

In the foodservice segment, the company is also promoting licensing of a viable concept selected through our research, such as the “Chinmaya” brand, as additional means to assist BLP’s growth. In this model, a license is sold to include trademarks, recipes, proprietary properties and management expertise.

3. Building Sustainable Earning Structure

The company is currently building a sound management foundation by shifting the internal sales structure so that the group can attain solid earnings on a monthly basis. This will lead the management to accumulate earnings for an entire fiscal year and achieve sustainable growth in coming years.

It is imperative that each franchise headquarters build a stable and sustainable earnings structure in each industry segment to increase franchisees’ unit profitability and satisfaction levels while reinforcing merchandising and developing franchisee units at the same time. This strategy will take the company to a stage of continued earnings growth.   

Business Segments

Membership / Financial Services

Venture Link has been building a strong network of small and medium sized businesses through alliances with local financial institutions throughout Japan. We are providing a wide variety of services to the allied financial institutions in this network, including a matching service among the banks’ clients, along with consultation services for management seminars and customer satisfaction surveys, in response to the government initiative of the “Relationship Banking” policy.

The “sales support program” is a consulting service designed to enhance daily sales operations of financial institutions by converging our vast database, think-tank functions and consulting expertise built through years of experiences. One of the regional banks was able to identify clients’ financing needs through this program and generated approximately 5.8 billion Yen worth of lending in just 6 months.

The aggressive efforts to expand our alliances with financial institutions have created 14 new alliances during the last fiscal year, including 5 major regional banks being ranked in the top 10 largest regional banks in Japan. These banks have sound management foundations as well as a number of prominent business customers as their clients. The number of alliances with financial institutions increased to 142, representing over 20% of all banks, S&L banks and credit unions in Japan. In particular, we currently have alliances with over 40% of all regional banks. These alliances as a resource provide us with access to a vast number of small and medium sized businesses nationwide looking for new business opportunities.

Foodservice Business Segment

Although Japan’s foodservice industry is a 24.5 trillion yen market, Venture Link sees attractive potential for growth in the industry. With no dominant players, this market allows a concept that precisely captures consumers’ needs and tastes to acquire substantial market share.

A rapidly aging population coupled with changes in demographics and households will keep consumers’ lifestyles changing, which in turn will give rise to new business opportunities. We select and launch foodservice brands with special attention to offering “healthy food” and “traditional home meals”. Our three brands of “Chinmaya”, “Shokudo” and “Kappogi” clearly represent the market segments we have selected based on the results of our market analysis.

Chinmaya

The “Chinmaya” brand is a licensing brand by Venture Link, specializing authentic Scheziwan foods. Using special varieties of Scheziwan spices, the unique Chinese menu has been developed to target lunch customers in search of “healthy food” and “reasonable prices” based on the pre-launching survey. Our focus in this concept is to keep customers returning over and over to the restaurants, while keeping the concept fresh and long-lasting.

The “Chinmaya” chain has now grown to 63 units as of January 31, 2007 since opening the first company-owned unit in 2004.

Shokudo and Kappogi

These franchise brands are both operated by Fujio Food System (Hercules 2752) as the headquarters, and Venture Link provides support in franchise development and supervising services.

The “Shokudo” brand was developed after an in-depth study of the market, including consumers’ behavior, selling trend of each item, margin and customer satisfaction, to find the best concept matched to consumers’ dining needs.

As projected, this brand proved very successful by opening 250 units in 2 and one-half years (as of June 2, 2006) after the first franchise unit opened in December 2003. It is noteworthy that the last 50 units opened in as little as 10 weeks to reach a total of 250 operating units.

This concept is heavily supported by all age groups from single people to families because of its popular menu consisting of traditional Japanese home meals which used to be prepared and served at home. The restaurant has an inviting clean interior design and offers high quality food for which customers frequent as repeat diners. The operation is efficient and low-cost by serving buffet style where customers find enjoyment in selecting dishes matched to their tastes.

The “Kappogi” brand is targeting the baby boomer generation by offering sake and meal menus. The chain has grown with a unique format requiring low initial investment, yielding high, stable earnings and creating many frequent customers.

Both of these concepts are unique in attracting and hiring of middle aged women as restaurant staff, which generates a high social values by offering jobs to a wide range of the population.

Education Business Segment

With many years of experience in educating and training young staff in a number of the group’s franchise units, Venture Link entered the education industry to apply our expertise to educate school age children who will support the future of the country.

The momentum for Venture Link to enter this market segment grew strong with our firm belief that activating human resources is essential in our society, and our mission is to develop personal character in each child as well as with a growing sense of crisis in the education system in Japan towards the future.

Under surging pressure to find solutions in the education system’s numerous problems including low academic aptitude of children, We have commit ourselves to promote effective education programs to foster children’s dreams toward the future.

7 Habits for Juniors

“7 Habits for Highly Effective People” is one of the best selling business books authored by Dr. Stephen R. Covey with over 15 million copies sold in more than 36 countries around the world. The educational seminar has been implemented by more than 1,500 large corporations (with over 3,000 employees) for employee training, and is recognized as one of the best personal training programs worldwide.

Venture Link has developed an educational program based on the principles introduced in the book to help school age children to understand and get in the habit of exercising these principles in daily life, and launched the franchise of the “7 Habits for Juniors” brand among prep schools and private high schools.

After a trial period, two major prep school chains implemented the program as a mandatory requirement in the schools in April 2006, and 5 private high schools and vocational schools have introduced it into their curriculum. These developments contributed to the rapid growth of enrollment in the program from 2,000 to 10,000 students during a short period of time.

Private high schools have found the impact of the program effective not only to raise motivation among students, but also to reform awareness among teachers towards education. This will further promote development of franchisees among private schools.

As of July 31, 2006, one of the major prep school chain has its 1,071 students enrolled in the program in 127 classrooms. We anticipate other prep schools and private high schools will follow and help expand the chain.

Takumi Hompo

Venture Link operates the retail franchise “Takumi Hompo” brand offering healthy and safe food products under the concept of “a provider of traditional home meals”. This brand promotes specialty foods supplied direct from nationwide producers to the baby boomer generation, who are concerned about health and aging, in a neighborhood retail establishment.

In a format using a corner space in existing retail stores in neighborhood shopping areas, the chain grew quickly reaching 400 units in just two years after launch with strong support from consumers preferring to shop for high quality healthy foods in their neighborhood.

The original franchise started as the “Sandaime Shigezo” brand offering tofu and other related products, and subsequently was upgraded to the current “Takumi Hompo” brand by expanding product lines to rice, eggs, pickles and other food in a larger space generating double monthly sales.

Particularly successful among the 400 units in the chain are those units combined with food manufacturers’ factory outlets. The “Takumi Hompo” brand will be established starting this fiscal year in a new format in collaboration with manufacturers who have a growth strategy to promote factory outlet stores. This concept will leverage the popularity of the “Takumi Hompo” brand to enhance its own product lines. The outlets of multiple manufacturers will eventually be connected in a network which will be used as additional channels by other participating manufacturers.

The primary target market of these chains is the maturing population including the baby boomer generation who maintain strong buying power in the aging society and can afford to pay higher prices for specialty products. They have strong preference to purchase daily staple products as recommended by retail stores they frequently visit. Venture Link considers this initiative will reactivate neighborhood retail owners and their community who have been suffering from the loss of customers to large retailers.

Other Business Segment

In-house research and development is one of the keys for success in introducing a new franchise brand. As a part of the Other Business Segment, the R&D division is engaged to research and analyze relevant changes in marketplace such as demographics and household structure, labor market, and competitive analysis.

A 100% subsidiary offers sales promotion support utilizing cellular phone technology to help foodservice franchisees boost sales. The service generates revenues out of usage by franchisees, and is planning to enter the telephone communication service industry through its cellular phone application.

Venture capital business still maintains potential capital gain opportunities through IPO of businesses they invested in the past, although currently the division is not actively pursuing new investment opportunities. Another subsidiary offers leasing of restaurant equipment to new units opened by franchisees, generating revenues from leasing income from franchisees.