GICS Sector : Consumer Cyclical
FAT Brands Inc., a multi-brand franchising company, acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide.As of August 22, 2022, it owned seventeen restaurant brands, including Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean, and Ponderosa Steakhouse/Bonanza Steakhouse, as well as franchises and owns approximately 2,300 locations.The company was incorporated in 2017 and is headquartered in Beverly Hills, California.
FAT Brands reported adjusted EBITDA of $13.1 million for the third quarter, a decline from $14.1 million in the year-ago quarter. Total revenues were $140 million, a 2.3% decrease from $143.4 million in the previous year's quarter, primarily driven by the closure of underperforming Smokey Bones locations and lower same-store sales. The company's EPS came out at -$3.39, missing estimates of -$2.43. The casual dining segment showed promising results with same-store sales growth of 3.9%. The company's P/S Ratio stands at 0.03, indicating a potentially undervalued stock.
Publication Date: Nov -19
The company has made significant progress in its strategic execution, with Twin Hospitality Group gaining momentum under Kim Boerema's leadership. Same-store sales decline has narrowed to 3.5%, down from 4.2% in the second quarter. The casual dining segment demonstrated strong results, with same-store sales growth of 3.9%. As Andrew Wiederhorn noted, "consumers are seeking value, which is driving the success of QSRs. However, in casual dining, the focus is on providing a great guest experience to justify the higher prices."
FAT Brands is advancing plans for a $75 million to $100 million equity raise at Twin Peaks to pay down debt and fund new unit development. The company has already executed over $10 million in SG&A reductions and is actively negotiating a debt restructuring with its noteholders. Kenneth Kuick stated that there are plans to convert Smokey Bones locations to Twin Peaks, both corporate and franchise-owned, which is expected to drive growth.
Analysts estimate revenue growth of 4.4% for the next year. The company's EV/EBITDA ratio stands at -32734.24, indicating a potentially distressed valuation. However, with the dismissal of the DOJ case and the resolution of derivative matters, FAT Brands is poised to achieve positive cash flow in the coming quarters, reduce its debt, and build a strong foundation for long-term growth.
Great American Cookies Lights Up the Holiday Season with Free Cookies on National Cookie Day
Dec -01
FAT Brands Inc. (FAT) Reports Q3 Loss, Lags Revenue Estimates
Nov -13
Round Table Pizza Brings Legendary Flavor to Austin Area
Nov -07
FAT Brands Inc. (FAT) Q3 2025 Earnings Call Transcript
Nov -05
FAT Brands to Announce Third Quarter 2025 Financial Results On November 5, 2025
Nov -04
Fatburger Spotlights World Vegan Month with Free Impossible Burgers
Nov -04
Great American Cookies Adds New Location in Mississippi
Oct -23
No Tricks! Fazoli's Celebrates National Breadstick Day with Free Breadsticks
Oct -22
FAT Brands Inc.'s 13% growth in the Restaurant segment is driven by increasing brand recognition, strategic marketing efforts, and expansion into new markets. Additionally, menu innovation, improved operational efficiency, and effective cost management contribute to the growth. Furthermore, the company's focus on digital transformation, including online ordering and delivery, also supports the segment's growth.
FAT Brands Inc.'s 12% royalty growth is driven by increasing brand recognition, strategic partnerships, and expansion into new markets. Rising demand for franchising and licensing opportunities, coupled with effective brand management, contributes to the growth. Additionally, the company's diversified portfolio of brands, including Fatburger and Buffalo's Cafe, benefits from a loyal customer base and consistent marketing efforts.
FAT Brands Inc.'s 11% growth in Advertising Fees is driven by increasing brand awareness, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital marketing and social media presence has contributed to the growth. Furthermore, the rise of e-commerce and online shopping has led to higher demand for advertising services, resulting in increased revenue.
FAT Brands Inc.'s Factory segment growth is driven by increasing demand for co-branded restaurants, strategic partnerships, and expansion into new markets. Additionally, menu innovation, digital transformation, and effective marketing strategies contribute to the 10% growth rate.
FAT Brands Inc.'s 12% growth in Franchise Fees is driven by increasing brand recognition, strategic marketing efforts, and expansion into new markets. Additionally, the company's focus on digital transformation, improved operational efficiency, and strong relationships with franchisees have contributed to the growth. Furthermore, the rise of the quick-service restaurant industry and growing demand for convenience foods have also supported the increase in Franchise Fees.
FAT Brands Inc.'s 11% growth in 'Other' segment is driven by increasing demand for its franchise brands, successful marketing initiatives, and strategic partnerships. Additionally, the company's focus on digital transformation, menu innovation, and operational efficiencies have contributed to the growth. Furthermore, the segment has benefited from the company's expansion into new markets and territories, leading to increased revenue and profitability.
A fast-casual restaurant chain serving burgers, sandwiches, and salads
A casual dining restaurant chain serving buffalo-style chicken wings and American comfort food
A fast-casual restaurant chain serving organic and grass-fed beef burgers
A fast-casual restaurant chain serving Mediterranean-inspired bowls and sandwiches
A casual dining restaurant chain serving steaks, seafood, and American comfort food
A casual dining restaurant chain serving steaks, seafood, and American comfort food
A casual dining restaurant chain serving wings, burgers, and American comfort food
FAT Brands Inc. operates in the restaurant industry, where substitutes are readily available. However, the company's diverse portfolio of brands, including Fatburger, Elevation Burger, and Yalla Mediterranean, helps to mitigate the threat of substitutes.
FAT Brands Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's brands have a strong reputation, making it difficult for customers to negotiate prices.
FAT Brands Inc. relies on a network of suppliers for ingredients and materials. While the company has some bargaining power due to its size, suppliers may still have some negotiating power, particularly if they are sole suppliers of critical ingredients.
The restaurant industry is highly competitive, and new entrants can easily enter the market. FAT Brands Inc. must continually innovate and differentiate its brands to maintain market share.
The restaurant industry is highly competitive, with many established brands competing for market share. FAT Brands Inc. must continually innovate and differentiate its brands to maintain market share.
| Value | |
|---|---|
| Debt Weight | 122.72% |
| Debt Cost | 7.69% |
| Equity Weight | -22.72% |
| Equity Cost | 13.22% |
| WACC | 6.43% |
| Leverage | -540.10% |
Value: 5.3
Growth: 5.0
Quality: 6.6
Yield: 4.0
Momentum: 8.5
Volatility: 6.3
1-Year Total Return ->
Value: 10.0
Growth: 3.3
Quality: 5.6
Yield: 10.0
Momentum: 0.0
Volatility: 2.7
1-Year Total Return ->
Value: 5.7
Growth: 4.6
Quality: 4.5
Yield: 6.0
Momentum: 4.5
Volatility: 4.0
1-Year Total Return ->
Value: 7.7
Growth: 3.3
Quality: 3.5
Yield: 6.0
Momentum: 0.5
Volatility: 3.0
1-Year Total Return ->
Value: 7.7
Growth: 2.0
Quality: 3.0
Yield: 8.0
Momentum: 0.5
Volatility: 2.3
1-Year Total Return ->
Value: 9.6
Growth: 2.1
Quality: 2.4
Yield: 1.0
Momentum: 0.5
Volatility: 3.0
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