Chubby Group Is Buying 47 Gen Korean BBQ Stores for $100 Million. Gen's Texas Bars Are Down 29% This Year.

The deal

Gen's board approved a binding letter of intent with Chubby Group on Wednesday. Chubby takes over operations at 47 U.S. restaurants. Gen keeps the brand, its packaged-foods business and about three restaurants "to support training, staffing, and CPG research and development." The parties are working toward a close within 30 days, subject to license transfers, lease transfers, regulatory approvals and definitive agreements.

The release doesn't describe a cash payment at closing. Gen will add a term note receivable, and its risk language refers to "payments based on the future performance of the acquired locations" and the chance "that allocations for certain locations are removed from the total consideration." Chubby takes over the stores in four phases over 12 months and funds the conversions itself. Gen keeps operating profits until each store changes hands, and it can convert any unpaid balance of the note into Chubby equity at a $1.5 billion valuation. Gen says the deal would substantially reduce its roughly $160 million of lease liabilities, and it expects to eliminate its outstanding debt afterward.

"This transaction monetizes our restaurant operations while shareholders retain full ownership of our rapidly growing CPG business," CEO and Chairman David Kim said. Chubby founder David Zhao said the company will "build on the Korean BBQ experience these guests know with a wagyu-forward menu."

Gen shares closed at $1.69 on Wednesday, up 16.6%. The company went public in June 2023 at $12.

The two companies already work together. In March, Gen agreed to move five restaurants into a joint venture that Chubby controls with 51%; four had moved by the end of May. One of them was in San Antonio, on Interstate 10 at The Rim. It moved to the joint venture on April 30, and its Gen permit hasn't reported beverage revenue since April.

Thirteen Texas stores

Gen came to Texas in 2016 with a store in Carrollton's Koreatown. Frisco and Midtown Houston followed in 2019, then Webster in 2022. The pace picked up after the IPO. Westheimer in west Houston opened in late 2023, Arlington around the turn of 2024, and Greenville Avenue in Dallas and Pflugerville later in 2024. San Antonio, North Austin, Waco and El Paso opened in 2025, and Denton and McAllen this year. Gen called McAllen its 13th Texas location.

That's more than a quarter of the roughly 50 U.S. stores Gen had at the end of June.

More stores, smaller bars

Gen's Texas beverage revenue grew as it added stores, from $2.08 million in 2022 to $3.10 million in 2025. Revenue per store went the other way.

| Year | Stores reporting | Texas beverage revenue | Per store per month | |---|---|---|---| | 2021 | 3 | $1.92M | $53,400 | | 2022 | 4 | $2.08M | $54,700 | | 2023 | 5 | $2.23M | $43,800 | | 2024 | 8 | $2.79M | $32,900 | | 2025 | 12 | $3.10M | $23,800 | | 2026 (Jan to Aug) | 14 | $1.79M | $17,500 |

2026 includes San Antonio through April.

The newer stores average less than the originals, and the originals are shrinking too. The three stores Gen had open through all of 2022, in Carrollton, Frisco and Midtown Houston, reported $2.04 million in 2022 and $1.43 million in 2025, down 30%. The 11,218 Texas venues that reported every month of both years fell 6.7% over the same stretch.

This year

From January through August, the eight Gen stores that reported every month of 2025 and 2026 took in $1.28 million in beverage revenue, down 28.9% from $1.80 million.

| Store | Jan to Aug 2025 | Jan to Aug 2026 | Change | |---|---|---|---| | Carrollton | $428,661 | $337,737 | -21.2% | | Houston, Midtown | $388,350 | $290,418 | -25.2% | | Arlington | $221,299 | $124,999 | -43.5% | | Frisco | $203,046 | $151,757 | -25.3% | | Pflugerville | $197,207 | $112,772 | -42.8% | | Dallas, Greenville Ave. | $148,799 | $118,911 | -20.1% | | Houston, Westheimer | $106,761 | $59,941 | -43.9% | | Webster | $101,736 | $80,485 | -20.9% | | Eight stores | $1,795,859 | $1,277,020 | -28.9% |

The 15,508 Texas venues that reported every month of both periods were down 0.75%.

Counting each store against its own month a year earlier, Gen's Texas stores have reported less than the prior year for 15 straight months, since June 2025. August was the widest gap, at 41.8%.

Texas bars are falling faster than the chain overall. Gen reported comparable restaurant sales down 9.3% for the second quarter across the whole chain, food and drink in every state. Its comparable Texas stores' beverage revenue fell 27.7% in April through June.

Gen has tied the slump to pressure on its customers. "Since the majority of our customer base is Hispanic in most markets, and they have been put under extreme pressure through immigration enforcement, our customers have retracted and are afraid to come out," the company said in its 2025 results release. It also cited higher fuel prices.

The category

Same-store bar revenue is falling across Texas Korean BBQ, Gen's fastest. We tracked 95 Korean BBQ and tabletop-grill restaurants that reported beverage revenue this year.

| Group | Comparable stores | Jan to Aug change | Stores down | |---|---|---|---| | Gen | 8 | -28.9% | 8 of 8 | | KPOT | 7 | -16.8% | 6 of 7 | | Gyu-Kaku | 5 | -16.5% | 5 of 5 | | Independent Korean BBQ | 37 | -7.8% | 26 of 37 | | All Korean BBQ except Gen | 49 | -11.3% | 37 of 49 | | Texas market | 15,508 | -0.75% | |

The comparable Korean BBQ stores other than Gen have reported less than a year earlier every month since March 2023, 42 in a row. Over the longer run, the five Gyu-Kaku stores open through 2022 and 2025 fell 34.4%, and 16 independents fell 21.4%.

KPOT is the exception that keeps opening. Its 13 Texas stores reported $2.45 million from January through August, up 38% on new locations, even as its comparable stores fell 16.8%. Over the last 12 months a KPOT averaged $24,200 a month at the bar. A Gen averaged $18,100.

The two chains sell different drinks. Beer is 72% of Gen's Texas beverage revenue over the last 12 months. At KPOT, liquor is 68%. Across the category, liquor is 53%.

Food costs aren't helping. Beef and veal prices were up 3.5% in September from a year earlier, and ground beef was up 5.4%, according to the Bureau of Labor Statistics. The USDA forecasts beef and veal prices up 9.4% for 2026. The U.S. cattle herd started the year at 86.2 million head, the smallest since 1951. Gen said in its second-quarter results that it buys "nearly $40 million of meat a year." Its food cost rose to 34.6% of revenue in 2025 from 33.0%, and its restaurant-level adjusted EBITDA margin fell to 13.8% from 17.7%. In the second quarter it was 11.3%, against 16.3% a year earlier.

What Chubby is buying

Chubby Group, founded in 2016, runs more than 70 restaurants across 25-plus brands, including Chubby Cattle, Wagyu House and NIKU X. It reported $233 million in 2025 revenue and expects $400 million in systemwide sales this year. Its Chubby Cattle tiers run $58, $78 and $88 a person.

It's already building in Texas. Chubby entities hold four Texas permits, in Austin, Houston, Plano and San Antonio. Only one has reported beverage revenue so far: Wagyu House in the Houston Galleria, which reported $38,000 from May through August.

Chubby plans to take over the 47 stores in four phases over 12 months and move them to what Zhao called a wagyu-forward menu. Gen's average unit volume was just under $5.0 million over the 12 months through June, down from $5.3 million a year earlier. At $2.1 million a store, the price is about 43% of a year's sales per location, before the leases that move to Chubby and the conversions it funds. Part of the payment depends on how the stores perform.

Sources: Texas beverage tax receipts, monthly reported beverage revenue for Gen Korean BBQ House permits in Texas, 2016 through August 2026. Same-store comparisons count a venue only if it reported positive revenue in every month of both windows. Monthly comparisons count a store if it reported in both the month and the same month a year earlier. Texas benchmarks: 15,508 venues for January to August 2025 and 2026; 11,218 for 2022 and 2025. The Korean BBQ set covers 95 Texas Korean BBQ and tabletop-grill restaurants that reported in 2026, identified by name. Deal terms from Gen's Oct. 14 release; financials from Gen's SEC filings and earnings releases; Chubby figures from Gen's Oct. 14 release and FSR; menu tiers from Hoodline; beef data from the Bureau of Labor Statistics, USDA and agweb.