Kona Grill has suffered from softer demand for seafood and alcohol. | Photo: Shutterstock
A handful of Kona Grills will be replaced by one of the chain’s sister brands this year.
Parent company The One Group said it plans to convert five locations of the upscale Asian concept to either Benihana or STK. It’s part of a “portfolio optimization” for 25-unit Kona that also included the closure of six unprofitable locations last year and one in 2026.
It comes amid a long streak of same-store sales declines at Kona. In both 2024 and 2025, same-store sales in One Group’s Grill segment fell more than 12%, and they are down another 12.5% so far this year. The Grill segment includes results from both Kona and the 12-unit RA Sushi chain.
The company has blamed these struggles largely on changing consumer habits, including less spending on seafood and alcohol and rising sushi competition.
STK and the recently acquired Benihana have performed better in comparison. Last year, Benihana same-store sales fell 0.8%, while STK’s were down 3.8%.
The conversions have attractive economics. The One Group estimates it will cost $1 million to $1.5 million to turn the Kona Grills over into a new brand, an investment it expects to make back within a year.
The five locations have already been closed and are being prepared for conversion. The company expects them to be reopened by July.
The remaining Kona Grills, meanwhile, are expected to be 100% profitable with better margins.
The One Group has had success converting other restaurants. Last year, it turned an RA Sushi into an STK. The store is now operating at an annualized revenue run rate of $7 million, an increase of more than $4 million, beating expectations.
It also has big plans for Benihana, the 80-unit teppanyaki chain it acquired in 2024. It recently signed a 10-unit development agreement for the brand in the San Francisco area, which will include units of Benihana Express, a scaled-back version without the teppanyaki tables.
It is the largest franchise agreement in The One Group’s history. The company also plans to open two company-owned Benihanas this year.
The company continues to invest in marketing and digital at Benihana, including the new Friends with Benefits loyalty program that covers all of The One Group’s concepts. It has also pared back the menu and is working to get table turn times down to 90 minutes, from 100 or 105.
Overall, Denver-based The One Group is expecting a better year in 2026. It is projecting same-store sales growth of 1% to 3% and consolidated adjusted EBITDA of $100 million to $110 million, which would be an 18% year over year improvement at the midpoint.
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