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Management is transitioning the company toward a CPG-focused model, citing significantly higher incremental return on invested capital and structurally better margins compared to the capital-intensive restaurant business.

The company received a non-binding letter of intent to sell its U.S. restaurant operations for approximately $100 million, a move intended to monetize the legacy business while retaining 100% of the high-growth CPG brand.

Performance is driven by the 'accessible authenticity' of Korean food, which management identifies as the fastest-growing international food category in the U.S., particularly among Gen Z and Millennial shoppers.

The CPG division leverages a capital-light model using co-packing partners, allowing the company to scale via purchase orders rather than construction projects or long-term lease commitments.

Management attributes the CPG success to existing brand recognition from millions of restaurant guests, which reduces the cost of customer acquisition in the competitive freezer aisle.

Operational efficiency is supported by an existing $40 million annual meat procurement infrastructure, providing immediate scale and buying power for the retail expansion.

Management projects a 12-month revenue run rate of $35 million to $40 million for the CPG business, based primarily on current customers with minimal contribution from the new business pipeline.

The growth strategy follows a three-layer framework: core frozen raw meats, a forthcoming 'deli-cook' replacement meal line, and a 'Korean incubator' for imported snacks and beverages.

The company expects the CPG division to deliver EBITDA margins in the high teens at scale, even after accounting for necessary promotional and in-store demonstration investments.

Future growth is supported by a pipeline of more than 1,000 doors already presented to buyers—including wholesalers and cruise lines—as well as active outreach to more than 8,000 future doors at grocery stores and mass retailers.

Management intends to maintain development spending at maintenance levels for the remaining restaurant portfolio while prioritizing labor efficiencies and food cost controls.

The proposed $100 million sale of restaurant operations would eliminate long-term liabilities tied to leases and provide capital to accelerate CPG initiatives.

Q2 2026 results included a $0.6 million loss on a lease termination and a significant increase in food costs, 81% of which was driven by the new CPG business carrying retail-specific cost structures.

General and administrative expenses increased to 12.8% of revenue, entirely due to investments in CPG go-to-market strategies, including marketing and in-store demonstrations.

The company increased its debt to $24 million, primarily through an $11 million draw on a credit line to fund the inventory build required for the CPG expansion.

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The projected run rate is described as conservative, reflecting current sales velocity and existing distribution rather than speculative new contracts.

Management noted that June revenue surpassed $2 million, and the step-up to the projected run rate is supported by recent entries into new retail locations that order on two-week cycles.

While the primary focus remains on meat, the incubator tier (snacks/beverages) is seeing double and triple-digit growth driven by retailer demand.

Management noted that while these products have longer lead times due to South Korean manufacturing, they offer significantly better margins than the core meat category.

The $35 million to $40 million guidance excludes any contribution from the upcoming cooked replacement meal line, which grocers suggest could eventually double or triple frozen sales.

Launch timing has been deliberate to ensure taste and texture profiles exceed current competitors; three of four initial products have been approved for launch.

Management clarified that the GEN brand will be retained entirely by the CPG entity, and the potential buyer would only acquire restaurant operations and leases.

The company is already achieving its high-teens EBITDA margin targets for CPG, suggesting the business is profitable at its current scale even before full separation.