Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased by 2.7% year over year to $50.4 million, driven by new restaurant openings [8][10] - Same store sales dropped by 9.9% in Q3 2025, reflecting a downturn in customer traffic due to macroeconomic pressures [8][9] - Restaurant level adjusted EBITDA margin was 15% for Q3 2025, down from 18.2% in Q3 2024 [19] - Net loss before income taxes was $3.9 million, equating to $0.11 per diluted share, compared to a net income of $0.3 million or $0.01 per diluted share in Q3 2024 [18] Business Line Data and Key Metrics Changes - The company opened 15 new restaurants in the first nine months of 2025, with eight openings in Q3 alone [5][6] - The average unit volume (AUV) revenue per restaurant was $5.2 million, indicating strong performance in the casual dining space [9][10] - The cost of goods sold as a percentage of restaurant sales increased to 34.8%, reflecting inflationary pressures and the impact of new restaurant openings [14][16] Market Data and Key Metrics Changes - The company has expanded its grocery store initiatives, launching ready-to-cook Korean branded meats in over 600 grocery locations, anticipating annual revenues from this segment could exceed $100 million over the next four to five years [7][8] - The company is experiencing a downturn in customer traffic, particularly in California and Texas, attributed to economic factors affecting its customer base [30][31] Company Strategy and Development Direction - The company aims to build brand awareness through grocery store initiatives and expand its product offerings beyond restaurants [7][12] - The management is focused on maintaining growth while considering a potential slowdown in new restaurant openings if economic conditions do not improve [20][42] - The company plans to continue its expansion in South Korea, where operational costs are lower compared to the U.S. [6][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for the restaurant industry but expressed confidence in their value-focused dining model for long-term growth [5][10] - The company is monitoring customer traffic closely and may adjust growth plans based on performance in the upcoming holiday season [20][42] - Management highlighted the importance of maintaining customer loyalty by not raising prices despite rising costs [15] Other Important Information - The company has approximately $5 million in cash and cash equivalents and full availability of a $20 million revolving credit facility [20][21] - The balance sheet reflects $165 million in lease liabilities, offset by $140 million in operating lease assets [21] Q&A Session Summary Question: Understanding the Korean units and their economics - Management indicated that the cons are outperforming the gens, with anticipated AUVs of $4 million for cons and $2-3 million for gens, with construction costs around $800,000 per store [26][29] Question: Trends on existing locations and Q4 expectations - Management confirmed continued softness in customer traffic, particularly in California, and expects similar trends in Q4 [30][31] Question: Grocery store initiative and revenue expectations - Management reported strong initial sales in test locations and expressed optimism about expanding product offerings in grocery stores [32][34] Question: Slowing or halting unit growth - Management confirmed they are considering pausing new restaurant openings if consumer trends do not improve, while still having several locations under construction [40][42] Question: Labor efficiency improvements - Management attributed labor efficiency gains to new technologies and operational adjustments, with potential for further improvements [53] Question: Competitive environment and market performance - Management noted that competitors are facing sales declines, but new entrants continue to emerge in the market [56]