🚩Alert on GEN Restaurant Group (GENK)

Why recent information has made us question the accuracy of unit history in filings

Disclaimer: All information provided herein by Cedar Grove Capital Management, LLC (“Cedar Grove Capital”) is for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security. An offer or solicitation of an investment in a private fund will only be made to accredited investors pursuant to a private placement memorandum and associated documents.

Cedar Grove Capital may change its views about or its investment positions in any of the securities mentioned in this document at any time, for any reason or no reason.

Students can get access to our research at a reduced rate by clicking here.

---

Red Flag on GENK → Closing Position

Misleading facts aren’t usually something that gets brought to our attention when we do our research but luckily for us, we were notified by @realLigerCub about some questionable historical facts, or lack thereof, for GENK’s historical unit volume, and then some.

We’ve been through this rodeo before with Xponential Fitness (XPOF) and how they lied (or misled) about certain box numbers which led to a historic downfall after peaking in 2023. Luckily, we got out near the top and didn’t endure the drawdown but this has the markings of the same situation which we will not be going down for the ride more than we already have.

Up to you all whether or not this is meaningful in your opinion but for us, trust is important with management and without that, what’s the point? Below we’ll highlight the issues brought to our attention and why we’ve decided to close the position immediately.

As part of our last full update on GENK, we shared the below image with you all as of November 23, 2024.

Source: CGC Note 11.24.24.

I want you to pay attention to the RHS where it says “28” and when that last location was opened (October 2019). This is going to be important to follow along with why that has led us to close the position.