GEN Restaurant Group has entered into a binding letter of intent to sell operations at 47 restaurants in the US to Chubby Group for $100m.
Under the deal, GEN will retain the GEN brand and its Korean consumer packaged goods (CPG) business.
GEN’s board approved the proposed deal unanimously. The companies are aiming to complete the transaction within 30 days.
The deal is expected to reduce GEN’s roughly $160m in lease liabilities and add a term note receivable to its balance sheet.
GEN expects to eliminate remaining debt after completion and may use additional capital for growth investment, dividends, or share repurchases.
Chubby Group will take over the 47 restaurants in four phases over 12 months. It will fund restaurant conversions and build-outs, while GEN will retain operating profits until each handover.
Founded in 2011 by two Korean immigrants in Los Angeles, GEN has established itself as one of the leading Korean BBQ brands in the US.
GEN will remain publicly traded and keep about three restaurants for training, staffing, and CPG research and development. It plans to restructure its corporate operations to focus solely on the CPG business.
Chubby Group, founded in 2016, operates more than 70 locations across over 25 brands, including Chubby Cattle, Wagyu House, The X Pot, NIKU X, Chubby Skewers, and Chubby Bowls. It expects system-wide sales of $400m in 2026 and plans to open 30 more restaurants by year-end.
After the transaction, GEN may convert any unpaid balance of the term note into Chubby Group equity at a $1.5 billion valuation.
Completion is subject to definitive agreements, licence and lease transfers, and regulatory approvals.
GEN chairman and CEO David Kim said: “This transaction with Chubby is a major milestone for GEN as part of the Company's continued evolution into a premier Korean consumer-packaged goods platform.
"This transaction would substantially reduce most of our liabilities on the balance sheet while giving GEN the option to participate in Chubby's growth.
“The term note receivable adds a meaningful asset to our balance sheet, and we expect its proceeds to allow us to eliminate our outstanding debt and strengthen our cash position.
“We are moving quickly toward closing and believe this is the right next step for GEN and our shareholders.”
