Five Restaurants Worth a Look
2025 has left some restaurant names for dead. Could these be opportunities?
Disclaimer: This is not investing advice. Everything written here is my own opinion and is for informational purposes only. Everything written here is subject to my own errors, biases, and other types of mistakes. You should do your own research and consult a financial advisor before making any investment decisions. At the time of writing, I own shares of PTLO, GTIM, BDL, and GENK. Assume at the time of your reading that I may have any type of position in any name mentioned.
This year has been brutal to the share prices of quite a few restaurant companies. Many have had a difficult year - consumer sentiment has been quite poor and the notion that people have been eating out at restaurants less frequently is supported by the weak same store sales numbers that a lot of restaurants have reported this year. Meanwhile, the more or less continuous inflation of the past several years has pressured margins.
Needless to say, this combination of circumstances has caused the market to get very pessimistic about certain restaurant companies, with some share prices getting cut in half or more throughout 2025. The stock performance of some of these names would have you thinking eating food at restaurants was on the decline…forever! Interestingly, the market still has its darlings among restaurants: names like Chipotle and Cava that still trade at 4-5 times sales and 30+ times earnings. These names would suggest a world where restaurants thrive and grow.
The market paints a picture of the extremes, whereas I would guess that the future for restaurants in aggregate will be rather uneventful. People need to eat, and even AI won’t change that. The financial health of the average consumer may change around with time, but food is among a small list of things people would spend their last dollar on. Furthermore, some restaurants that offer inexpensive food and emphasize value might stand to benefit from consumers shifting away from higher-end dining options.
It is among some of the beaten down names that I’ve found opportunities that I think are compelling. If you’ve followed my writing this year, you’ll already know that many (maybe most) of the companies I’ve written about in depth have been restaurants. I particularly like investigating these names because anybody can go to some locations that the company operates, try the food, observe the business, and verify a lot of things for oneself. Plus, as you’ve gathered, I really like eating. So, if you’re at all interested in hunting for value among restaurant names that have been punished this year, here are five companies that I think are worth a look (and maybe a visit).
1. Portillo’s Inc. PTLO
Portillo’s captured my attention and then my heart this year. But it’s among the names that have been most decimated by the market in the past several months. Back out 2, 3, or 4 years and you can see that this has been a story of pain since the company’s IPO. Is this fair?
For those unfamiliar with Portillo’s at this moment, it is a fast, casual, everyday value restaurant that was born and raised in Chicago. The people in your life who have lived in Chicago will know the name, and I’m sure will be able to tell you all about it. You can also read my introductory writing about Portillo’s to learn more about it.
Portillo’s offers delicious, fast, high-quality, and inexpensive foods - there’s something for everybody on the menu. It is common for people to associate Portillo’s with Chicago dogs, but I try to avoid doing that in my writing because I think it doesn’t do the company justice in terms of its broad range of very attractive menu offerings. Italian beef and other types of sandwiches, burgers, salads, cake, and fries are just some of the fan favorites, and I sampled a number of them when I visited Portillo’s locations for the first time. You can read about that trip here:
Portillo’s is now in the early stages of a nationwide expansion plan. It just opened its 100th restaurant in Kennesaw, Georgia (that’s a little outside of Atlanta). Texas and Florida are two states that have seen a number of new locations opened in recent years. Some of the newer locations have contributed to the market’s concern for the company: Portillo’s original locations in the Chicago area have historically put up amazing numbers per unit (think $10+ million AUV). Challenges to deliver such strong results at some of the newest locations have invited a lot of speculation that the concept won’t succeed or isn’t as good outside of the Chicago area (an opinion I disagree with).
Loyal customers, great food (quality, value, and taste), and attractive unit economics are some of the pillars that support my interest in this company. But the market currently seems more concerned with execution risk and a challenging year for results and growth. Only time will tell where this one will end up.
2. Good Times Restaurants Inc. GTIM
Good Times is the company on this list that I think is the most left for dead by the market. An initially small market cap was halved over the course of the year - now GTIM’s market cap is just $14 million. Any list of public companies with nearby market capitalizations is bound to be full of nonsense, and Good Times is surrounded by junk. Perhaps that’s why it’s ignored, but I think the company is worth much more than $14 million. It’s a respectable business that accidentally got lumped in with heaps of shitcos, and now it’s having a hard time getting out of that neighborhood.
Good Times owns and operates nearly 70 restaurants under two concepts. 40 of these locations are Bad Daddy’s Burger Bar restaurants, generally thought of as the more promising of the two concepts. The company has a clean balance sheet and trades at just 0.4x book value and a mere 0.1x sales. For a company this tiny and this cheap, just verifying that the locations actually exist and do real business means something. Fortunately for me, this company’s restaurants are highly concentrated in the Denver area. As a result, I go to Good Times and Bad Daddy’s quite frequently, and as a result of that, I’ve written about the company a handful of times.
What’s amazing to me is that over the past ten years, GTIM has quietly grown and tripled revenue, without dilution or meaningful debt. In recent years, it’s been chipping away at the share count, maintaining a healthy cash balance, and been disciplined about growing new locations when the conditions aren’t favorable to do so. I find myself generally in agreement with a lot of the decisions the company makes, and I’ve never been disappointed in a burger from either concept.
I understand GTIM is currently so small that it’s really only suitable for individual investors. But this company is clearly overlooked and I see a ton of value that could get unlocked very suddenly if the company were to sell either of its two concepts for a fair price. Historical transactions would suggest that the company is severely undervalued. If you’re interested in GTIM, check out the writing below:
3. Flanigan’s Enterprises, Inc. BDL
To my eye, Flanigan’s is a true gem of a business. It’s another small company that often goes overlooked, and it’s the one company on this list whose share price actually performed well this year! Good for Flanigan’s. While many restaurants have struggled this year, I think Flanigan’s has had a rather good year - its intensely loyal customers and confined geographic presence likely contributed to that. For an overview of the company, you can check out this piece:
Be aware that Flanigan’s, despite being a ubiquitous brand in South Florida, is an unusually illiquid stock. Shares don’t trade very much, and I think that’s because most owners of this company are comfortable just owning it, instead of feeling the need to constantly buy and sell it. Most of the shares are owned by members of the Flanigan family, who made a notable and high-signal insider purchase earlier this year. If it feels like you’re investing in a family business, that’s because you are!
Flanigan’s is the perfect opportunity for an investor to think and behave like a private company owner even though the company is public. I believe the long-term record of creating value for shareholders, evidenced by growth in earnings, book value, and share price, will continue. The market has yet to give Flanigan’s credit for its wonderful business, but when it does, I’ll be there!
If you’re closer to a Flanigan’s than I am, get yourself a plate of rib rolls for me!
4. GEN Restaurant Group Inc. GENK
I’ll pound the table with enthusiasm about the three names we’ve looked at so far. I’m more cautious about GEN Korean, but it’s worth keeping an eye on. GEN Korean is a growing chain of Korean BBQ restaurants where the main draw is the grill-at-your-table experience along with the all you can eat aspect of the menu. It’s meant to be fun and special but still fairly casual and affordable.
Growth in new locations is proceeding at a fast pace. The company has opened 15 new locations in 2025, and started the year with around 40 locations. However, 6 of these newly opened locations are in South Korea. The move to make expansion into South Korea an apparent priority is something that, frankly, I don’t understand. This action by the company is among a handful of strategic and capital allocation decisions that seem all over the place to me.
A couple of years ago, when GENK was newly public, it seemed like the story the company was telling was along the lines of “Korean BBQ is great, our unit economics are awesome, and we just need to execute and grow” and nowadays they’re doing things like:
Prioritizing Korea over the United States regarding new locations
Introducing a sushi concept
Selling a consumer packaged good in grocery stores
Weird small dividends and share repurchases that seem to prioritize headline activity rather than actual return of capital
These things have me wondering: what’s wrong with the basic Korean BBQ model that the company feels the need to do all this other stuff? On the other hand, I don’t want to dismiss the fact that GEN Korean is growing rapidly and appeared reasonably profitable before 2025. If the share price hadn’t been crushed in 2025, would I still be questioning the company’s decisions?
As you can see, I’m on the fence regarding GENK. It might have gotten dragged down unnecessarily far with a lot of restaurant names in 2025, but I still think I need to watch the company and learn more about it if I am to build conviction one way or another. I haven’t written up Gen Korean yet, but I have eaten at one location and feel that helped me start to develop more understanding of the business. It is possible that I will write more about this company in the future if I learn anything that I think is worth sharing.
5. Ark Restaurants Corp. ARKR
Ark is a new name for me, and so far I’ve only taken a cursory look at it. Maybe we can dig deeper into this name together. Ark owns a bunch of restaurants, and they’re basically all different concepts rather than a chain of the same brand. Much of the company’s revenue comes from restaurants in New York, Florida, and Las Vegas, but it also has a presence in a few other states.
Ark has taken a beating this year. Besides the usual restaurant woes, it seems the company is also in a legal dispute over the ability to operate what is probably its most important single restaurant, Bryant Park Grill in NYC. You can check out company filings or this article to get a quick rundown of the situation there. Interestingly, the other company involved - which could benefit if the lawsuit does not resolve itself in Ark’s favor - is Seaport Entertainment Group, a name you’re probably familiar with if you spend a decent amount of time on Substack. Perhaps in later writing we can go down that avenue as well.
Ark is very inexpensive relative to sales and historical profitability, even when considering the possible loss of the Bryant Park business. It has a strong balance sheet with a respectable cash position. And I find myself having a lot of appreciation for CEO Michael Weinstein’s short, candid letters at the beginning of the Annual Report.
Overall, it’s a beaten down name with a bit of special situation energy right now. I’ll be looking further into this company and the situation and possibly writing a longer post in the new year!
As always, thank you for reading and for your support! It’s been a great year of writing about companies and food, and I can’t wait for the next investing field trip. Please feel free to reach out with suggestions and comments! Merry Christmas and Happy New Year!