By Mann Aggarwal
FAT Brands Inc., the parent company of restaurant chains including Fatburger, Twin Peaks, Johnny Rockets, and Round Table Pizza, filed for voluntary Chapter 11 bankruptcy protection in federal court in Texas on Monday, seeking to restructure roughly $1.3 billion in debt obligations.
FAT Brands’ portfolio includes 18 restaurant concepts spanning fast casual, quick-service and casual dining, with more than 2,300 locations worldwide, according to the company’s website. The filing came months after FAT Brands announced an expansion deal to add 40 Fatburger locations in Florida over the next decade. (RELATED: Beaten Like An Egg, Battered Like A Chicken Cutlet: Cracker Barrel Brings Back Two Favorites After Customer Backlash)
In a statement, CEO Andy Wiederhorn said the company is “well positioned for long-term profitability and growth” and that “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.”
The company’s bankruptcy follows a wave of similar filings from casual-dining chains, including Red Lobster and Hooters. A FAT Brands spokesperson said “market conditions over the past few years have been difficult and largely unforeseen” in a statement to Fox Business — a common refrain from restaurant brands struggling with inflationary pressures and declining customer traffic.
A key factor was FAT Brands’ default on its roughly $1.3 billion in whole business securitization debt. After the company missed required payments in October, its creditors declared the full amount due immediately. Creditors warned they could foreclose on the collateral — the restaurant brands themselves — if FAT didn’t file for bankruptcy protections.
