FAT Brands Inc

What they do

FAT Brands develops, markets, acquires and manages quick service, fast casual, casual dining and polished casual restaurant concepts, operating primarily as a franchisor. It collects initial franchise fees, ongoing royalties and advertising fees from over 730 franchise partners while generally not owning the restaurant real estate. It also directly owns and operates 181 restaurants and runs a manufacturing facility in Atlanta, Georgia supplying cookie dough and pretzel dry mix to franchisees.

Revenue drivers

• Restaurant sales (company-owned) — Sales at the 181 company-owned locations were $413.5 million in fiscal 2024, up from $299.0 million in 2023, and represent the largest single revenue line.
• Royalties — Ongoing royalties from franchised restaurants totaled $90.0 million in fiscal 2024, slightly below the $94.0 million reported in fiscal 2023.
• Advertising fees — Fees collected from franchisees for advertising were $39.5 million in fiscal 2024, essentially flat versus $39.5 million in 2023.
• Factory and franchise fees — Factory revenue from the Atlanta production facility was $37.9 million in fiscal 2024, while initial franchise fees contributed $6.5 million.

Recent performance

Fiscal 2024 revenue was $592.7 million versus $480.5 million in 2023, driven largely by the September 2023 Smokey Bones acquisition. Fiscal 2024 net loss was $189.8 million, wider than the $90.1 million loss in 2023, reflecting $644.9 million of costs and expenses. General and administrative expense rose $35.4 million to $128.6 million on the Smokey Bones acquisition and increased professional fees tied to pending litigation. Quarterly revenue has been relatively flat in 2025: $145.3 million for the quarter ended December 29, 2024, $142.0 million, $146.8 million and $140.0 million in the three subsequent 2025 quarters. Fiscal 2024 operating cash flow was negative $56.2 million.

Strategy

Management describes an asset-light franchisor model intended to produce strong margins and free cash flow while minimizing real estate and capital commitments. Growth has come from acquiring additional brands and concepts, including Smokey Bones in September 2023, and expanding existing brands. The company says its scalable management platform lets it add stores and concepts with minimal incremental corporate overhead. It operates as one reporting segment across franchised and company-owned restaurants. Per a January 27, 2026 8-K, the company has since entered bankruptcy or receivership proceedings and triggered an accelerating obligation.

Risks

• Franchisee dependence — Most restaurants are franchisee-operated, so franchisee financial distress or insolvency can cut royalty payments.
• High leverage and negative equity — At September 28, 2025 total liabilities were $1.80 billion against $1.21 billion of assets, leaving shareholder equity of negative $585.8 million.
• Persistent losses and cash burn — Net losses widened to $189.8 million in fiscal 2024 and operating cash flow was negative $56.2 million.
• Bankruptcy and delisting — 8-Ks filed January 27, 2026 report bankruptcy or receivership and an accelerating obligation, with separate delisting notices filed January 9 and January 30, 2026.

Outlook

The 10-K and 10-Q excerpts provided do not include forward guidance beyond describing the franchised model and acquisition-led growth strategy. The January 2026 8-K disclosures report bankruptcy or receivership, a triggering event accelerating an obligation, and delisting notices, which supersede prior operating commentary. No post-bankruptcy financial statements or restructuring terms are contained in the source material.