ChocoZap: “There is no possibility of a price increase.”Introducing washer/dryers to karaoke… Continued huge investment of 40 billion yen over 3 years

The services of “chocoZAP”, a low-priced gym operated by the LIZAP Group, will further expand from April. On March 28th, they announced the introduction of new karaoke and washer/dryers. If you are a ChocoZap member, you can use it at no additional charge.

Laundry and karaoke are also available within the monthly membership fee.

In addition to karaoke, a washer/dryer, seven new facilities will be introduced: Pilates, self-photography, a kids park, training support provided by Rizap trainers (Train Support), and MRI/CT examinations. The introduction of both will be expanded gradually.

According to the announcement, karaoke will be available at 20 stores, washer/dryers will be available at 70 stores, and Pilates will be available at 100 stores by the end of April. Tresapo aims to have 100 trainers by the end of June, and to regularly visit stores.

MRI and CT tests will be provided in collaboration with medical institutions. The company plans to start with one store in Shinjuku and expand to other urban areas across the country. The cost of a typical MRI/CT scan is high, ranging from 20,000 to 40,000 yen, and the uptake rate is low. Encourage people to see a doctor while reducing their financial burden.

All services do not require any additional fees and can be used for just a monthly ChocoZap membership fee of 3,278 yen (tax included).

Ken Seto, president of Rizap Group, took the stage at the presentation.

“(All new services) are usually paid, butAll free for membersis. I think there are many people who are hesitant to invest in themselves due to the financial burden, so I hope you will use it to your heart’s content.”

I said.

Is there any possibility of a price increase in the future?President Seto

“There is no possibility. There are ways to come up with ideas by deciding not to raise prices.”

I declare.

The karaoke, washer/dryer, training machines, etc. provided by Choco Zap do not have the latest equipment or the highest quality in order to offer them at low prices. The company plans to maintain prices by continuing to reduce procurement costs and improve operations.

Where does the investment money come from?

ChocoZap has refrained from opening new stores in the second half of fiscal 2023, but will start opening new stores again from spring 2024. Although the new service will not be implemented at all stores, it will require a significant amount of investment.

As part of its fundraising efforts, the company sold the shares of its major shareholder, President Seto, in an off-auction sale in March. The plan was to secure up to 10.6 billion yen by selling 27,755,200 shares and using the proceeds from the sale to exercise stock acquisition rights, but only about 20%, or 6,041,000 shares, were sold. Ta.

“In terms of communication in the market,I have failedI think. We apologize for causing confusion, but we will invest all of the proceeds from the sale (funds obtained from the sale) back into the company.” (President Seto)

President Seto will use the funds obtained from this sale (approximately 2.277 billion yen) to exercise stock acquisition rights as planned and reinvest in the ChocoZap business.However, the company plans to expand its ChocoZap business over the next three years (from 2024 to 2026).40 billion yenThe company has announced plans to invest in the company, and will also proceed with raising funds through other methods.

The company’s full-year results for the fiscal year ending March 2024 are expected to be an operating deficit of 1.8 billion yen, but the ChocoZap business has been in the black for a single month since November 2023. We will continue to accumulate profits, and from around the fall of 2024, we are drawing up a plan to use cash flow to invest in regrowth.