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GEN Restaurant Group, Inc.

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Business Summary

GEN Restaurant Group, Inc. (GEN Inc.) operates as one of the largest Asian casual dining restaurant concepts by total revenue in the United States, offering traditional Korean and Korean-American food, including high-quality meats, poultry, and seafood, at a fixed price point . The company's business model is characterized by an "all-you-can-eat" offering, with lunch prices generally ranging from $20.95 to $20.99 and dinner prices from $29.99 to $33.95 as of December 31, 2025, with slight variations at specific locations . This model is designed to be efficient, requiring fewer chefs and servers as guests cook the majority of their food at embedded table grills, which also ensures consistent food quality and allows for catering to high traffic levels . The company also has a wholesale segment, offering ready-to-cook meats through partnerships with grocery stores, expanding to over 800 locations in 2025 with an expected expansion to 1,500 to 2,500 grocery stores in 2026 .

The company's core business model revolves around its 57 company-owned restaurants as of December 31, 2025, located across California, Arizona, Hawaii, Nevada, Texas, New York, Oregon, North Carolina, Washington, New Jersey, Florida, and South Korea . Revenue is primarily generated from in-restaurant sales of food and beverages, with a minor portion from its online portal and retail/wholesale distribution . The "cook-it-yourself" model is a key differentiator, reducing kitchen personnel needs and allowing for more guest seating space . The company targets new restaurant units to achieve Average Unit Volumes (AUVs) ranging from $4.0 million to $5.0 million .

For the fiscal year ended December 31, 2025, GEN Restaurant Group reported total revenue of $212.541 million , an increase of $4.161 million or 2.0% from $208.380 million in 2024 . Gross profit, calculated as revenue less food costs, was $138.751 million in 2025, resulting in a gross margin of 65.3% , compared to $139.650 million and 67.0% in 2024. The company experienced a loss from operations of $(19.993) million in 2025, a significant decrease from an income of $0.476 million in 2024, leading to an operating margin of (9.4)% compared to 0.2% . Net loss for the period was $(19.375) million , a substantial decline from net income of $4.532 million in 2024. Diluted EPS attributable to Class A common stock was $(0.59) in 2025, down from $0.13 in 2024. Cash and cash equivalents stood at $2.824 million as of December 31, 2025, a decrease from $23.675 million in 2024. Total notes payable, including current and non-current portions, amounted to $13.607 million as of December 31, 2025. The company had a working capital deficit of $(31.3) million in 2025, compared to $(7.2) million in 2024.

Year-over-year, revenue increased by 2.0% , driven by the opening of 15 new restaurants in 2025 compared to 6 in 2024 . However, comparable restaurant sales decreased by (7.9)% in 2025, a further decline from a (5.6)% decrease in 2024. Food costs as a percentage of revenue increased from 33.0% in 2024 to 34.7% in 2025, primarily due to inflationary cost increases . Payroll and benefits as a percentage of revenue decreased from 30.9% to 30.6% , reflecting labor efficiencies . Occupancy expenses as a percentage of revenue increased from 8.4% to 10.0% due to the addition of new locations . Operating expenses as a percentage of revenue also increased from 10.3% to 11.4% due to revenue growth support and inflationary pressures . General and administrative expenses increased by 21.6% to $25.935 million in 2025, reaching 12.2% of revenue, up from 10.2% in 2024, driven by increased marketing and personnel costs related to expansion . The company recognized an impairment expense of $5.527 million in 2025 related to fixed assets of five underperforming restaurants , and a gain on lease termination of $0.471 million from the closure of one restaurant .

During 2025, the company opened 15 new restaurants, including six in South Korea, bringing the total to 57 company-owned restaurants . Subsequent to December 31, 2025, two additional restaurants were opened in Denton, Texas and Tucson, Arizona . The company also entered into a partnership agreement with Chubby Cattle, Inc. on March 24, 2026, to contribute most assets of five existing restaurants in exchange for a 49% ownership in new restaurants, resulting in an asset reserve of approximately $4.0 million as of December 31, 2025 . The company also finalized an agreement on February 18, 2024, to acquire the remaining 50% ownership stake in GKBH for $6.0 million , gaining 100% control .

Business Outlook

GEN Restaurant Group's growth strategy for the foreseeable future is centered on opening and operating new restaurants profitably, with a target Payback Period of less than 3 years, equating to an ROI of 33% to 40% for new units . The company expects to open four to eight other locations during 2026, in addition to the two restaurants already opened in Tucson, Arizona, and Denton, Texas, subsequent to December 31, 2025 . The company has signed 18 leases for new locations as of December 31, 2025, with openings planned during 2026 and thereafter . New restaurant units are targeted to achieve Average Unit Volumes (AUVs) ranging from $4.0 million to $5.0 million, with average Net Build-Out Costs of less than $3.0 million .

The company plans to increase restaurant sales and profitability through modest price increases, having initiated one near the end of the fourth quarter of 2024 with no discernable change in guest behavior, and another in February 2026 in most restaurants . Management believes there may be additional opportunities for modest price increases in the future without materially impacting customer traffic . Operational efficiencies are also a focus, with ongoing investment in new technologies to improve cost structure and enhance the dining experience .

In terms of cost structure, the company expects inflationary pressures on food, ingredients, labor, construction, and utilities to continue through 2026 . While food costs as a percentage of sales increased from 33.0% to 34.6% from 2024 to 2025, payroll and benefits costs as a percentage of sales decreased from 30.9% to 30.4% due to labor efficiencies . The company aims to offset cost pressures through menu price increases and operational improvements, though success is not assured . General and administrative expenses are expected to grow proportionally with sales, including incremental legal, accounting, insurance, and other expenses associated with being a public company and improving internal controls .

The company's liquidity and capital resources are expected to be sufficient to fund lease obligations, capital expenditures, and working capital needs for at least the next 12 months, relying on cash provided by operating activities and cash on hand . Capital expenditures for new restaurants and existing restaurant maintenance, renovation, and improvement are ongoing requirements . The company has a $5.0 million stock buyback program, under which 33,388 shares of Class A common stock were purchased for $201 thousand during 2025, with approximately $4.8 million remaining under the program . The company does not currently have a plan to pay cash dividends on its Class A common stock in the future, intending to retain all future earnings for business development and general corporate purposes .

Risk Factors

GEN Restaurant Group faces several material risks, including inflationary conditions impacting food, ingredients, labor, construction, and utilities, which may not be fully offset by price increases or operational improvements, potentially adversely affecting revenues and results of operations . Global and domestic economic conditions, including public health crises, could negatively affect consumer discretionary spending and financial performance . The company's growth strategy is dependent on successfully opening new restaurants, which may not be profitable or meet expected sales, and expansion into new markets carries increased risks due to unfamiliarity with local conditions and consumer preferences . Sales cannibalization from new restaurants in existing markets could also negatively impact sales growth . The geographically concentrated nature of the restaurant base, with approximately 42% of domestic restaurants in California and 30% in Southern California, makes the company disproportionately vulnerable to adverse conditions in these markets . Significant reliance on certain vendors and suppliers, including Sysco Los Angeles, Inc. for 57.4% of food costs in 2025 , poses a risk of supply shortages and increased costs if these relationships are disrupted . Intense competition in the restaurant industry, particularly from other "all you can eat" Asian concepts, could adversely affect the business . Food safety concerns, food-borne illnesses, and outbreaks of diseases could negatively impact restaurant sales and reputation . Changes in consumer attitudes regarding diet and health or new regulations could require menu modifications and increase costs . The company's reliance on the proper operation of specialized equipment, such as embedded grills, presents a risk of mechanical failure, customer injury, or litigation . The loss or failure to protect intellectual property, including trademarks, could enable competitors and negatively affect brand perception . Negative publicity, amplified by social media, could reduce sales across all restaurants . Long-term non-cancelable leases for all restaurant locations expose the company to ongoing obligations even if restaurants are unprofitable or closed, and renewal failures could lead to increased costs or closures . Labor shortages, increased labor costs due to minimum wage increases (especially in California), or unionization activities could adversely affect growth and profitability . Failure to obtain or maintain required licenses and permits, particularly for alcoholic beverages, could harm operations . Litigation, including employment-related claims and "dram shop" statutes, could distract management, increase expenses, and result in material damages not fully covered by insurance . The company's current indebtedness, including a $20.0 million revolving line of credit with $1.0 million outstanding as of December 31, 2025 , and $4.3 million in Economic Injury Disaster Loans , could limit operational and financing flexibility . Payments under the Tax Receivable Agreement, expected to aggregate $99.6 million through 2037 , could be substantial and potentially exceed actual tax benefits . The company's status as an "emerging growth company" and "smaller reporting company" allows for reduced disclosure requirements, which may make its common stock less attractive to some investors .

Management Priorities

Management's message to shareholders emphasizes a continued focus on growth through new restaurant openings and enhancing profitability at existing locations. The company successfully opened 15 new restaurants in 2025, including six in South Korea, and plans to open an additional four to eight locations in 2026, building on the two already opened in Tucson, AZ and Denton, TX subsequent to year-end . A key strategic priority is to achieve a Payback Period of less than 3 years for new restaurant units, equating to an ROI of 33% to 40%, with targeted AUVs ranging from $4.0 million to $5.0 million . Management also highlights efforts to increase restaurant sales and profitability through modest price increases, noting successful implementations in late 2024 and February 2026 without significant changes in guest behavior, and will continue to monitor opportunities for further price adjustments . Furthermore, the company is committed to investing in new technologies to improve cost structure and enhance the dining experience, while leveraging strong supply chain capabilities and efficient labor models to control costs amidst inflationary pressures .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Company Overview
  2. [2] Item 1, Business — Our Strengths
  3. [3] Item 1, Business — Our Strengths
  4. [4] Item 1, Business — Company Overview
  5. [5] Item 1, Business — Company Overview
  6. [6] Item 7, MD&A — Components of Results of Operations
  7. [7] Item 1, Business — Our Strengths
  8. [8] Item 1, Business — Our Growth Strategies
  9. [9] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  10. [10] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  11. [11] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  12. [12] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  13. [13] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  14. [14] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  15. [15] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  16. [16] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  17. [17] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  18. [18] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  19. [19] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  20. [20] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  21. [21] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  22. [22] Item 7, MD&A — Results of Operations for the Years Ended December 31, 2025 and December 31, 2024
  23. [23] Item 7, MD&A — Liquidity and Capital Resources
  24. [24] Item 7, MD&A — Liquidity and Capital Resources
  25. [25] Item 8, Note 9 — Notes Payable
  26. [26] Item 7, MD&A — Liquidity and Capital Resources
  27. [27] Item 7, MD&A — Liquidity and Capital Resources
  28. [28] Item 7, MD&A — Revenues
  29. [29] Item 7, MD&A — Revenues
  30. [30] Item 7, MD&A — Comparable Restaurant Sales Change
  31. [31] Item 7, MD&A — Comparable Restaurant Sales Change
  32. [32] Item 7, MD&A — Food costs
  33. [33] Item 7, MD&A — Food costs
  34. [34] Item 7, MD&A — Food costs
  35. [35] Item 7, MD&A — Payroll and benefits
  36. [36] Item 7, MD&A — Payroll and benefits
  37. [37] Item 7, MD&A — Payroll and benefits
  38. [38] Item 7, MD&A — Occupancy expenses
  39. [39] Item 7, MD&A — Occupancy expenses
  40. [40] Item 7, MD&A — Occupancy expenses
  41. [41] Item 7, MD&A — Operating expenses
  42. [42] Item 7, MD&A — Operating expenses
  43. [43] Item 7, MD&A — Operating expenses
  44. [44] Item 7, MD&A — General and administrative expenses
  45. [45] Item 7, MD&A — General and administrative expenses
  46. [46] Item 7, MD&A — General and administrative expenses
  47. [47] Item 7, MD&A — General and administrative expenses
  48. [48] Item 7, MD&A — General and administrative expenses
  49. [49] Item 7, MD&A — Impairment expense
  50. [50] Item 7, MD&A — Impairment expense
  51. [51] Item 7, MD&A — Gain on lease terminations
  52. [52] Item 7, MD&A — Gain on lease terminations
  53. [53] Item 1, Business — Company Overview
  54. [54] Item 7, MD&A — Business Trends
  55. [55] Item 8, Note 19 — Subsequent Events
  56. [56] Item 8, Note 19 — Subsequent Events
  57. [57] Item 1, Business — Company Overview
  58. [58] Item 1, Business — Company Overview
  59. [59] Item 1, Business — Our Growth Strategies
  60. [60] Item 7, MD&A — Business Trends
  61. [61] Item 7, MD&A — Business Trends
  62. [62] Item 1, Business — Our Growth Strategies
  63. [63] Item 1, Business — Increase Restaurant Sales and Profitability
  64. [64] Item 1, Business — Increase Restaurant Sales and Profitability
  65. [65] Item 1, Business — Increase Restaurant Sales and Profitability
  66. [66] Item 1A, Risk Factors — Risks Related to Our Growth Strategy and Restaurant Expansion
  67. [67] Item 1A, Risk Factors — Risks Related to Our Growth Strategy and Restaurant Expansion
  68. [68] Item 1A, Risk Factors — Risks Related to Our Growth Strategy and Restaurant Expansion
  69. [69] Item 7, MD&A — Components of Results of Operations
  70. [70] Item 7, MD&A — Liquidity and Capital Resources
  71. [71] Item 1A, Risk Factors — Our plans to open new restaurants, and the ongoing need for capital expenditures at our existing restaurants, could result in a shortage of capital.
  72. [72] Item 8, Note 18 — Cash Paid for Common Stock Purchased
  73. [73] Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  74. [74] Item 1A, Risk Factors — Inflationary conditions with respect to the cost for food, ingredients, labor, construction, and utilities, and we may not be able to increase prices or implement operational improvements sufficient to fully offset such costs, which may adversely impact our revenues and results of operations.
  75. [75] Item 1A, Risk Factors — The impact of global and domestic economic conditions on consumer discretionary spending could materially adversely affect our financial performance.
  76. [76] Item 1A, Risk Factors — New restaurants, once opened, may not be profitable, and the increases in average restaurant sales and comparable restaurant sales that we have experienced in the past may not be indicative of future results.
  77. [77] Item 1A, Risk Factors — The opening of new restaurants in existing markets may negatively affect sales at our existing restaurants.
  78. [78] Item 1A, Risk Factors — Our restaurant base is geographically concentrated, and we could be negatively affected by conditions specific to our markets.
  79. [79] Item 8, Note 2 — Concentration Risk
  80. [80] Item 1A, Risk Factors — We rely significantly on certain vendors and suppliers, which could adversely affect our business, financial condition or results of operations.
  81. [81] Item 1A, Risk Factors — We face intense competition, and if we are unable to continue to compete effectively in the restaurant industry in general and, in particular, within the dining segments of the restaurant industry in which we compete, our business, financial condition and results of operations would be adversely affected.
  82. [82] Item 1A, Risk Factors — Food safety and food-borne illness concerns as well as outbreaks of flu, viruses or other diseases could have an adverse effect on our business, financial condition or results of operations.
  83. [83] Item 1A, Risk Factors — New information or attitudes regarding diet and health could result in changes in regulations and consumer consumption habits that could adversely affect our business, financial condition or results of operations.
  84. [84] Item 1A, Risk Factors — We rely significantly on the continued proper operation of our equipment, and any mechanical failure could prevent us from effectively operating our restaurants.
  85. [85] Item 1A, Risk Factors — The loss of any registered trademark or other intellectual property or our failure to maximize or successfully assert our intellectual property rights could enable other companies to compete more effectively with us.
  86. [86] Item 1A, Risk Factors — Negative publicity relating to one of our restaurants could reduce sales at some or all of our other restaurants.
  87. [87] Item 1A, Risk Factors — We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases.
  88. [88] Item 1A, Risk Factors — If we face labor shortages, increased labor costs or unionization activities, our growth, business, financial condition and operating results could be adversely affected.
  89. [89] Item 1A, Risk Factors — Failure to obtain and maintain required licenses and permits or failure to comply with alcoholic beverage or food control regulations could lead to the loss of our liquor and food service licenses and, thereby, harm our business, financial condition or results of operations.
  90. [90] Item 1A, Risk Factors — We could be party to litigation that could distract management, increase our expenses, or subject us to material monetary damages and other remedies.
  91. [91] Item 1A, Risk Factors — Our current indebtedness, and any future indebtedness we may incur, may limit our operational and financing flexibility and negatively impact our business.
  92. [92] Item 1A, Risk Factors — Our current indebtedness, and any future indebtedness we may incur, may limit our operational and financing flexibility and negatively impact our business.
  93. [93] Item 1A, Risk Factors — Our current indebtedness, and any future indebtedness we may incur, may limit our operational and financing flexibility and negatively impact our business.
  94. [94] Item 1A, Risk Factors — GEN Inc. will be required to pay over to members of GEN LLC most of the tax benefits GEN Inc. receives from tax basis step-ups (and certain other tax benefits) attributable to its acquisition of units of GEN LLC in the future, and the amount of those payments are expected to be substantial.
  95. [95] Item 1A, Risk Factors — In certain circumstances, including at our option, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual tax benefits, if any, that GEN Inc. actually realizes.
  96. [96] Item 1A, Risk Factors — We are an “emerging growth company” and a “smaller reporting company” and as a result of the reduced disclosure requirement applicable to emerging growth companies and smaller reporting companies, our common stock may be less attractive to investors.
  97. [97] Item 7, MD&A — Business Trends
  98. [98] Item 1, Business — Our Growth Strategies
  99. [99] Item 1, Business — Increase Restaurant Sales and Profitability
  100. [100] Item 1, Business — Increase Restaurant Sales and Profitability

Analysis on 5/21/2026