Fat Brands, Owner Of 2,200 Eateries, Files For Bankruptcy
The parent company of several well-known fast-casual restaurant chains sought bankruptcy protection this week to reduce its debt obligations.
Beverly Hills-based Fat Brands Inc. filed for Chapter 11 bankruptcy protection Monday in Texas, according to Bloomberg. The company has more than $1.4B in funded debt obligations outstanding and has missed interest payments due in October.
Fat Brands’ portfolio includes brands such as Fatburger, Fazoli’s, Johnny Rockets and Hot Dog on a Stick among its 18 restaurant concepts. Those chains have more than 2,200 locations worldwide and over 45,000 corporate and franchise employees.
The company’s creditors called for a full and immediate repayment of its $1.2B in whole-business securitization debt after that missed payment. A group of creditors also said they would foreclose on the company’s collateral if it didn’t file for Chapter 11.
“The chapter 11 process will provide us with the opportunity to strengthen our capital structure to support our concepts and ensure they remain at the forefront of their sectors,” Fat Brands CEO Andy Wiederhorn said in a statement. “We plan to use this process to connect with key stakeholders around a value-maximizing plan and will act prudently to remain steadfast in upholding and protecting stakeholder interests.”
Wiederhorn said Fat Brands is “well positioned” for long-term profitability and growth. During the ICR Conference in Orlando, Florida, earlier this month, Wiederhorn said the company had been speaking with creditors about restructuring its debt for the past 18 months, but those negotiations had been unproductive, Nation’s Restaurant News reported.
Fat Brands will use cash collateral and expected cash receipts to pay for the initial phase of the bankruptcy process, as it doesn’t yet have a restructuring plan in place. It also plans to seek new financing to operate in Chapter 11.
The company has used brand acquisitions to finance its growth and pay down debt over the last several years, according to Nation's Restaurant News. Fat Brands acquired Johnny Rockets in 2020; Global Franchise Group, Twin Peaks, Fazoli’s and Native Grill & Wings in 2021; and Smokey Bones in 2023.
The filing joins a growing list of restaurant chains that have cut locations or entered bankruptcy in recent years.
Hooters filed for bankruptcy last April with plans to transition to a franchise model. TGI Fridays, Red Lobster and Buca di Beppo also each sought court-facilitated restructuring through bankruptcy filings in 2024.
Earlier this month, TGI Fridays announced plans for more than 600 new store openings and a goal of $2B in annual revenue by 2030.
Red Lobster exited bankruptcy in late 2024 after being acquired by a Fortress Investment Group-backed investor that committed to more than $60M in new funding for the brand.
