FATAQRetail-Eating PlacesIFRS · EUR

Fat Brands, Inc

FAT Brands is a restaurant franchising company that owns and develops a portfolio of 18 brands spanning quick-service, fast casual, casual dining, and polished casual concepts. Its model combines franchise royalties and fees with a smaller base of company-operated restaurants, giving it exposure to both asset-light recurring income and restaurant-level operating performance.

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Revenue593m EUR
+23.4 %y/y
Operating profit (EBIT)-52.2m EUR
−333.9 %y/y
EBIT margin-8.8%
−13.5 ppy/y
Net income-190m EUR
−110.7 %y/y
Free cash flow-79.0m EUR
−45.0 %y/y

Fiscal year 2024 · change from previous year

Development 2019–2024

-2000200400600m EUR2019: 23 m EUR2019: EBIT 5.9 m EUR20192020: 18 m EUR2020: EBIT -16 m EUR20202021: 119 m EUR2021: EBIT 0.82 m EUR20212022: 407 m EUR2022: EBIT -18 m EUR20222023: 480 m EUR2023: EBIT 22 m EUR20232024: 593 m EUR2024: EBIT -52 m EUR2024593-52
RevenueOperating profit (EBIT)

Business

Share of revenue
Franchise royalties and fees55 %

Ongoing royalties, initial franchise fees, and related advertising income from franchised restaurants.

Company-owned restaurant sales30 %

Food and beverage sales from restaurants operated directly by the company.

Advertising and brand support8 %

System-wide advertising fees and brand-level support services for franchise networks.

Factory and supply-chain revenue5 %

Revenue from dough/factory operations and related supply activities supporting the restaurant system.

Other revenue2 %

Miscellaneous revenue items not captured in the core operating streams.

Products

Reported · share of revenue
69.8%15.2%FY2024100 %
  • Restaurant Sales69.8 %
  • Royalty15.2 %
  • Advertising6.7 %
  • Factory6.4 %
  • Franchisor1.1 %
  • Other0.9 %

Source: 10-K FY2024, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

FAT Brands sells primarily to franchise operators that want access to established restaurant concepts, brand standards, and system support. It also serves end consumers through its company-owned restaurants, where demand depends on traffic, menu appeal, and local execution. The company’s customer base is therefore a mix of business customers buying franchise rights and consumers buying meals and beverages.

Franchisees

Operators that buy franchise rights, pay royalties, and rely on FAT Brands for brand standards, training, and marketing support.

Consumers

Guests purchasing food and beverages at company-owned and franchised restaurants across the portfolio.

Multi-unit restaurant operators

Experienced operators that expand existing brands or convert locations into FAT Brands concepts.

Advertising fund participants

System participants that contribute fees to support brand-level marketing and promotion.

Supply-chain and factory users

Restaurants and internal operations that depend on factory-produced inputs and related services.

Strategy

FAT Brands is focused on acquiring additional restaurant concepts and expanding existing brands through a franchised, asset-light model. Management emphasizes using the platform to add stores with limited incremental corporate overhead while relying on franchisee capital for growth. Near term, liquidity, debt access, and resolving securitization-related defaults are central to executing that strategy.

Expand the brand portfolio through acquisitionsMedium term

New concepts can add scale and diversify revenue streams, but require financing and integration capacity.

Grow franchised unit countShort term

The franchised model is more asset-light and can improve margin structure versus company-owned stores.

Protect liquidity and access to capitalShort term

Acquisitions, debt service, and expansion require financing, while current defaults and losses constrain flexibility.

Improve operating efficiency across the portfolioMedium term

Shared corporate infrastructure can support multiple brands if underperforming units are rationalized.

Geography

Q3/2025

The company describes its business as a worldwide franchise expansion platform, with locations open or under construction across multiple markets. The filing does not provide a country revenue split, but the operating footprint is international and depends on franchisee capital, local real estate, and brand rollout execution. Geography matters because growth, conversion timing, and restaurant openings can be delayed where suitable sites or financing are harder to secure.

United States97 %
Other countries (US filing)2.6 %

Share of the revenue the company reports by geography.

Risks

The company faces material financial and operational risk from leverage, securitization defaults, and weak liquidity, which can limit strategic flexibility. Because the model depends on franchisee expansion and restaurant performance, underperforming locations, conversion delays, and litigation can quickly pressure results. Restaurant demand, real estate availability, and capital-market access remain important industry-wide risks.

Sorted by severity
Securitization note default and potential manager removalCritical

The filing states the company was in default under its securitization notes, which could allow noteholders to remove FAT Brands as manager and accelerate obligations.

Exposure: GFG Royalty and related securitization structures

Liquidity stressHigh

The company reported very low unrestricted cash and negative operating cash flow, limiting its ability to fund operations and growth.

Exposure: Corporate operations and acquisition funding

Financing dependence for acquisitionsHigh

Future brand acquisitions are expected to require additional debt or equity financing, which may not be available on acceptable terms.

Exposure: Growth strategy execution

Restaurant performance and closure riskMedium

Revenue can decline when underperforming locations are closed or converted, and same-store sales weakness can pressure royalties and restaurant sales.

ExposureSmokey BonesTwin PeaksOther concepts
Litigation and covenant disputesMedium

The filing references pending litigation and allegations around commingled royalty collections, which can increase legal costs and covenant risk.

Exposure: Securitization entities and corporate overhead

Accounting

Judgemental items
Revenue mix and recognition

The company earns revenue from royalties, franchise fees, advertising fees, restaurant sales, factory revenue, and other items, so mix shifts affect margins and trend analysis.

Impact: Changes the balance between recurring franchise income and lower-margin restaurant sales

Preferred stock put liability

The company disclosed liabilities related to exercised put options on Series B Cumulative Preferred Stock, which require valuation and repayment assumptions.

Impact: Can materially affect liabilities and liquidity analysis

Securitization default accounting and disclosures

Default status under securitization notes can affect classification, control rights, and potential acceleration of obligations.

Impact: May affect debt presentation, going-concern perception, and covenant-related disclosures

Litigation and professional fee accruals

The filing cites increased professional fees related to pending litigation, which may require accrual judgment and disclosure.

Impact: Impacts operating expenses and earnings volatility

Restaurant closure and conversion effects

Closures and conversions can create one-time charges, revenue disruption, and potential impairment considerations.

Impact: Affects comparability across quarters and concept-level performance

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Last updated: 24/09/2026