If this were a franchise, than they are loosing money, for all I can see, as 70000 yen per hour for electricity is ~25% of the income.
The franchise formula subtracts a 15c/kWh allowance for electricity expenses before applying the 80/20 split.
15c/kWh seems pretty generous. I'm guessing these hashratio guys would be paying around a third of that rate.
We provide: whole mining device excluding PSU.
You provide: PSU, location, operation.
On each difficulty change, you pay us:
(x - 4.59*10^(-5)*t/y)*80% in which
x = 100% PPS of 850G
y = Bitcoin exchange rate on bitstamp
t = seconds in the last round
This is per device.
4.59*10^(-5) is electricity cost per second assuming power is 0.15$/kwh and each device draws 1.1kw.
If (x - 4.59*10^(-5)*t/y)*80% is already equal to or less than zero, or after three months and you decide that the project should discontinue, you can either sell them at market price (which is agreed by us) and pay us 80% of the sold value, or ship them back to us.
After that we give the deposit back to you.