Dive Brief:
- Gen Restaurant Group has received a letter of intent from a multi-concept restaurant operator interested in buying Gen Korean BBQ, a 59-unit casual dining chain, for $100 million, according to a Monday press release.
- Gen Restaurant Group would maintain control of its growing consumer packaged goods business if it agreed to the sale proposal in the letter.
- The chain is carefully evaluating the proposal to determine if it’s in the company's interest, CEO and Chairman David Kim said in a statement.
Dive Insight:
The deal would maximize the value of Gen’s restaurant business, according to the press release, while helping the brand’s parent company strengthen its balance sheet by offloading long-term liability attached to its restaurant division.
Despite growing by 10 net units from Q1 2025 to Q1 2026, Gen’s quarterly revenue from its restaurant segment actually fell from about $57.3 million to $53.9 million, according to its most recent 10-Q.
During the same period, the brand’s same-store sales slid by 8.8%, lapping an already significant 9.1% decline in Q1 2025, and its average unit volume fell from $5.4 million to $5.1 million.
Selling off its restaurant business would allow the company to focus on its CPG business.
“CPG growth is exponential; restaurant growth requires heavy capital investment in every new location, with significant risk,” Kim said. “In CPG, we piggyback on the real estate of our grocery market and club store partners; we grow without putting capital into buildings.”
Gen’s CPG products are sold through retailers including Albertsons banners, Stater Brothers, Smart & Final, Save Mart, BevMo, and multiple Costco regions, and the company is negotiating with other retailers to expand its sales. According to the press release, the company thinks it can achieve a $35 million to $40 million annual run rate from the CPG business by the end of 2026.
