Risk Score
Pending analysis
Investment Range
$379,500 - $865,000
Franchise Fee
$20,000
Total US Locations
15
Business Summary
RAKKAN Ramen operates quick-serve restaurant outlets that specialize in a variety of Japanese-style ramen noodle dishes, served with different types of broth, Japanese appetizers, and other authorized food, beverages, and related products. RAKKAN Ramen focuses on providing a full-service dining experience featuring proprietary recipes and ingredients.
Corporate History
The RAKKAN Ramen brand originated in Japan, with Mr. Ryohei Ito opening the first RAKKAN Ramen restaurant in Tokyo on June 6, 2011. After successfully operating three outlets in Tokyo, Mr. Ito expanded the brand to the United States. He opened the first overseas RAKKAN Ramen outlet in Los Angeles, California in July 2017, followed by a second in Redondo Beach, California in July 2018, and a third in Long Beach, California in November 2020. RAKKAN USA Franchise, LLC, the franchising entity, was formally organized in California on January 22, 2019, and began offering RAKKAN Ramen franchises in April 2019.
Financial Overview
Investment Range
$379,500 - $865,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$20,000
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$272,500
Equipment Costs (High)
$691,000
Working Capital
$17,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
RAKKAN USA Franchise, LLC's audited financial statements for 2024 and 2023 received an unqualified opinion from its auditor, indicating that the financial statements present fairly, in all material respects, the company's financial position and cash flows in accordance with generally accepted accounting principles. The net income for RAKKAN USA Franchise, LLC significantly decreased from $206,693 in 2023 to $6,153 in 2024. The company has a 'Due from affiliate' amount of $400,000 (2024) that is non-interest bearing and due on demand. The auditors did not identify any substantial doubt about RAKKAN USA Franchise, LLC's ability to continue as a going concern.
Financing Details
RAKKAN Ramen does not offer any direct or indirect financing to its franchisees. Franchisees are responsible for securing their own financing, as RAKKAN Ramen also does not guarantee any notes, leases, or other obligations.
Performance Metrics
Total US Locations
15
Franchised Units
12
Corporate Units
3
Avg Square Footage
1,993
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
RAKKAN Ramen has no litigation or legal disputes to report, as stated in Item 3 of its Franchise Disclosure Document. RAKKAN Ramen has not been involved in any material litigation, nor has there been any litigation that requires disclosure in this item.
Bankruptcy History
RAKKAN Ramen has no bankruptcy history to disclose, as stated in Item 4 of its Franchise Disclosure Document. Neither RAKKAN Ramen nor its management has been involved in any bankruptcy proceedings.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their RAKKAN Ramen franchise agreement, franchisees must notify RAKKAN Ramen in writing at least 180 days before their current term ends. At the time of renewal, franchisees must be financially sound, not have abandoned their outlet, not be operating in a way that endangers public health or the RAKKAN Ramen brand, and be in full compliance with all terms of their franchise agreement, with all fees paid. Franchisees will need to sign RAKKAN Ramen's then-current standard renewal franchise agreement, which may have different terms and conditions, and also pay a $5,000 renewal fee. Additionally, franchisees must make any necessary physical modifications to their outlet to align with current RAKKAN Ramen system standards.
Training & Support Program
Franchisor Assistance
RAKKAN Ramen provides comprehensive support to its franchisees. Before opening, RAKKAN Ramen helps with territory designation, provides an initial training program for the General Manager and a Principal Equity Owner, assists with site selection and gives final consent to the location, provides a general plan for the outlet's layout and equipment, and provides a Confidential Operations Manual. During operation, RAKKAN Ramen offers access to and integrates information into the RAKKAN Ramen website, provides phone and email guidance, conducts occasional outlet visits for operational and management guidance, notifies franchisees of any deficiencies in their outlet's appearance or cleanliness, and may recommend retail prices for products. RAKKAN Ramen also conducts mandatory annual system-wide meetings, which at least one Principal Equity Owner must attend.
Initial Training Hours
95
Training Location
Redondo Beach, California
Ongoing Support
After opening their RAKKAN Ramen outlet, franchisees receive ongoing support including access to and integration into the RAKKAN Ramen website. RAKKAN Ramen is reasonably available via phone and email for guidance on operation and management. Representatives may visit the outlet periodically to provide guidance and will notify franchisees if their outlet's appearance or cleanliness does not meet standards. RAKKAN Ramen also conducts mandatory system-wide meetings (or annual conventions) at least once a year in California or another designated U.S. location, with attendance required for at least one Principal Equity Owner. RAKKAN Ramen may also recommend retail prices for products and services sold.
Franchise Requirements
Ideal Candidate Profile
RAKKAN Ramen seeks individuals or entities that can demonstrate financial capability to meet the initial investment and pass a credit check. Franchisees must employ a designated General Manager who has successfully completed RAKKAN Ramen's initial training program and is committed full-time to the management, operation, and development of the outlet. If the General Manager is not a Principal Equity Owner, at least one Principal Equity Owner must directly oversee or personally participate in the outlet's operations. For area developers, General Managers with a satisfactory background in the restaurant business are also considered acceptable.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
exclusive
Territory Size Requirements
RAKKAN Ramen defines franchise territories as a designated geographical area around the outlet, determined using U.S. Census reports or other reliable demographers. The minimum territory granted to a franchisee will have a population of at least 50,000 people. The exact territory definition is mutually agreed upon with the franchisee and specified in their Franchise Agreement.
Staffing Notes
RAKKAN Ramen requires franchisees to employ at least one designated General Manager who must dedicate their full time during normal business hours to the management, operation, and development of the outlet. If this General Manager is not a Principal Equity Owner, then at least one Principal Equity Owner must directly oversee or personally participate in the outlet's operations. Franchisees are also required to conduct on-site training for their staff for a minimum of two weeks before the grand opening, and all RAKKAN Ramen personnel must adhere to prescribed uniform standards. While RAKKAN Ramen does not provide assistance in hiring employees, it specifies the need for adequately trained employees to conduct transactions using the Point of Sale system.