GEN Restaurant Group – the parent company of GEN Korean BBQ House – recently filed registration statements for an initial public offering (IPO) and became the latest restaurant company to look to the public equity markets for growth capital. The move is part of a recent trend of dining concepts IPOs – CAVA’s made its public market debut on June 15th, 2023 and Panera Brands’ plans to go public in the near future. We dove into the location intelligence metrics for GEN in order to take a closer look at the brand’s recent success and see what lies ahead for the casual dining concept.
Casually Outperforming
GEN has distinguished itself from the crowded casual dining market through its unique concept featuring an interactive and communal dining experience where customers grill their own meat at the table. Broadly speaking, the success of experiential restaurant concepts is tied to the shift of consumers away from physical goods toward services and experiences. Like other “eatertainment” concepts, GEN’s ability to capitalize on demand for dining experiences is helping to drive the chain’s foot traffic growth.
Pre-pandemic, GEN’s quarterly average visits per venue were consistently higher than average visits per venue in the casual dining sector by about 20%. Since Q2 2021 – following a challenging period of restrictions on in-person gatherings – GEN has sustained greater average visits per venue than the casual dining sector by even wider margins of approximately 45%. Because GEN is a concept geared toward groups, it took a significant hit while COVID restrictions were in place but is now reaping the benefits of pent-up demand for social experiences – a lesson that brands shouldn’t be too quick to react to temporary market changes.
The location intelligence metrics – which show increased visits to GEN – square nicely with the company’s revenue per restaurant over the past ten quarters. At present, the company is averaging roughly $5.6M in trailing twelve month revenue per location, which puts the chain near the top of FSR’s Top 50 full-service chains ranked by average unit volume for 2022.
Much like other brands, GEN is likely benefitting from the evolution of consumer taste preferences due to a variety of factors. Social media, access to a variety of options through third-party delivery, demand for better-for-you offerings, increased television programming devoted to food, and the globalization of restaurant concepts and menu innovations are all likely playing a part in GEN’s success.
(GEN)erational Dining
In its IPO filing, GEN noted that its “unique culinary experience appeals to a vast segment of the population, particularly Millennials and Gen Z” – and this statement is supported by the location analytics. Analyzing residents of GEN’s restaurants’ trade areas in Q1 2023 using the Census 2019 (ACS) dataset revealed that the chain was most popular among 15-29 and 30-34 year-old diners in the Millenial and Gen Z age groups. These visitors were likely drawn in by the restaurants’ “modern decor” and “vibrant Korean pop music” – which, like GEN, also rose to prominence in recent years.
Where Can It Go With an IPO?
From a growth perspective, the proceeds from GEN's IPO are expected to fuel the company's expansion plans in both existing and untapped markets. The company noted that it expects to open 6-7 additional locations during the remainder of 2023 and cited new markets for expansion that included Georgia, Oregon, Utah, Virginia, and Washington DC. Additionally, GEN is targeting average unit volumes (AUVs) of approximately $5M for new restaurants and average net build-out costs of $3M – higher than most restaurants due to the need for a ventilation system at each table.
GEN’s social and interactive restaurants are finding tremendous success among consumers who want a unique dining experience. With the growing popularity of global menus, GEN’s concept appears to be rising toward the top.
For updates and more data-driven foot traffic insights, visit Placer.ai.
