Pursuant to the Agreement, which has an initial term of three years, Tokyo Lifestyle will grant FLUSH franchise rights and a non-exclusive license to operate household-goods retail businesses under the Company's flagship brands: "東京生活館," "TOKYO LIFESTYLE," and "REIWATAKIYA."

Key Strategic Benefits

Deepening Domestic Footprint in a Priority Market

While Tokyo Lifestyle operates internationally, Japan remains its cultural origin and one of its core markets. Expanding its presence in Western Japan, particularly in the Kansai region, the country's second-largest metropolitan area, is expected to strengthen the Company's brand presence, improve supply chain efficiency, and enhance its competitiveness. A stronger domestic footprint may also support the Company's international expansion strategy by reinforcing its authentic Japanese-brand identity, a key differentiator in overseas markets.

Validation of Brand Strength and Franchise Model

Tokyo Lifestyle believes that FLUSH's decision to partner with the Company reflects growing recognition of the strength of the Tokyo Lifestyle and REIWATAKIYA brands, as well as confidence in the Company's merchandising capabilities, operational framework, and franchise support system. The partnership represents another step in expanding the Company's franchise ecosystem and extending its brand reach into new regional markets.

Leveraging Local Expertise for Cost-Efficient Expansion

Tokyo Lifestyle believes that FLUSH's local resources, business network, and market expertise will facilitate further expansion in Western Japan with lower capital requirements and reduced execution risk. This asset-light approach aligns with the Company's broader growth strategy of expanding through franchising and strategic partnerships, potentially enhancing return on invested capital while maintaining brand consistency and operational oversight.

O2O and AI-Powered Live Broadcasting as Growth Drivers

FLUSH's experience in digital operations and AI-powered live broadcasting is expected to complement Tokyo Lifestyle's expanding physical store network. The Company expects that FLUSH will integrate an Online-to-Offline ("O2O") model, which is generally designed to engage younger, digitally native consumers, drive incremental traffic and online-to-store conversions, transform physical stores into fulfillment and customer engagement hubs, and enhance sales efficiency, customer lifetime value, and customer loyalty through data-driven targeting and engagement.

Advancing Digital Transformation in the AI Era

The partnership is intended to accelerate Tokyo Lifestyle's evolution from a traditional retail operator to a modern "new retail" platform. By integrating AI-enabled live commerce and digital operational capabilities, the Company aims to build scalable digital assets and operational frameworks that may be replicated across additional franchise networks and geographic markets over time.

Mr. Mei Kanayama, Principal Executive Officer of Tokyo Lifestyle, commented: "We are excited to partner with FLUSH to accelerate the expansion of our franchise network in Japan by leveraging FLUSH's strengths and resources. Beginning with the first franchise store in Ginza, Tokyo, we envision this collaboration extending well beyond a single location: in the next phase of our partnership, we plan to expand further into the Western Japan market, particularly the Kansai region, with the goal of establishing a franchise network of eight stores. FLUSH's strong local presence and AI-powered digital capabilities complement our expertise in physical retail operations. We believe this O2O model will create meaningful synergies that support both our asset-light expansion strategy and our broader digital transformation initiatives in the emerging AI era.

"Through this collaboration, we expect to transform our stores into strategic hubs for fulfillment, customer engagement, and data-driven retail operations, enabling greater efficiency, enhanced customer experiences, and stronger brand loyalty.

"Strategically, we expect this partnership to strengthen our presence in Japan and support our global growth ambitions. Our authentic Japanese heritage remains one of our most important competitive advantages in international markets. By reinforcing our domestic foundation, we believe we can build a stronger and more sustainable platform for long-term global expansion.

"We also view this collaboration as a replicable blueprint for future regional growth, combining franchising, local market expertise, and digital innovation to achieve scalable, asset-light expansion. Over time, we expect this model to enhance brand recognition, increase market penetration, and improve operational leverage both within Japan and across international markets."