Management attributed significant traffic declines to extreme pressure on their primary Hispanic customer base due to immigration enforcement and reduced discretionary spending from rising fuel prices.

The company is strategically shifting focus from aggressive restaurant expansion to a high-growth Consumer Packaged Goods (CPG) model to reach national scale without heavy capital outlay.

A new joint venture with Chubby Cattle International for five non-performing units aims to convert underperforming assets into profitable entities while retaining a 49% equity stake.

Operational efficiency initiatives include streamlining menus to combat stubborn food cost inflation and implementing an AI program to reduce corporate overhead as development slows.

The Costco gift card program saw a 150% year-over-year increase to $29 million, which management views as a validation of strong brand recognition and a precursor to retail success.

Management emphasized that while same-store sales decreased, the brand maintains an 'elite' AUV of over $5 million per restaurant in the casual dining space.

The company targets 2026 full-year revenue between $215 million and $225 million, with an annual run rate approaching $250 million by year-end.

CPG expansion is projected to reach 1,500 to 2,000 locations by the end of 2026, with a long-term goal of 7,000 to 8,000 locations by 2027.

Management anticipates the CPG business will achieve a $100 million annual revenue run rate within three years, maintaining EBITDA margins in the high teens.

New restaurant development will significantly slow in 2026, focusing only on completing five units currently under construction and potentially adding 1 or 2 more by early 2027.

Financial guidance assumes a 15% to 15.5% restaurant-level adjusted EBITDA margin, supported by a $1 price increase implemented in Q1 2026.

A $4.5 million write-down was recorded in connection with the Chubby Cattle joint venture involving five non-performing restaurants.

The company recorded a $5.5 million provision for asset impairment in Q4 2025, contributing to a widened net loss.

Management is exploring partnerships with investment bankers to optimize logistics, supply lines, and potential investment for the accelerating CPG division.

The balance sheet reflects $173 million in lease liabilities under ASC 842, which management clarified are accounting recognitions rather than traditional long-term debt.

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Management expects the retail/CPG segment to contribute approximately $10 million to 2026 revenue, aiming for a $20 million run rate by year-end.

The core restaurant business is expected to generate approximately $205 million of the total revenue guidance at the lower end.

The company is leveraging existing restaurant infrastructure to minimize CPG overhead and is significantly reducing its construction infrastructure as it slows down restaurant development.

Capital needs for CPG are primarily tied to inventory and lag times in the supply chain rather than heavy fixed-asset investment.

High-teens margin projections for CPG already account for slotting fees, promotional investments, and various retail discounts.

CEO David Kim reported a 100% 'hit rate' in buyer meetings, with no retailers turning down the product line to date.

Current retail velocity is exceeding the internal benchmarks set by supermarket partners, driven by high demand for under-penetrated Korean ethnic food.

The company is using trained restaurant staff to conduct in-store demos, which has exponentially increased sales compared to third-party demo services.

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