FAT Brands Inc (FAT)

History and Background

FAT (Fresh. Authentic. Tasty.) Brands Inc. was founded in 2017. It acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant brands worldwide. Its growth has been driven by acquisitions of various restaurant chains.

Core Business Areas

• Franchising: Focuses on franchising restaurant brands, generating revenue from franchise fees and royalties based on sales.
• Restaurant Operations: Operates a limited number of company-owned restaurants, contributing to revenue through direct sales to customers.
• Manufacturing: Through its acquisition of Global Franchise Group, FAT Brands is a leading franchisor, licensor, and operator of a portfolio of more than 17 diversified brands.

Leadership and Structure

Andy Wiederhorn serves as the Chairman of the Board. The company operates with a structure focused on brand management and franchise support, with teams dedicated to each restaurant chain under its umbrella.

Key Offerings

• Fatburger: Classic burger chain. Competitors include McDonald's (MCD), Burger King (RBI), and Wendy's (WEN). Market share data is not publicly available at a granular level for individual FAT Brands restaurants, but within the broader burger market, the aforementioned chains have significant shares.
• Johnny Rockets: Retro-themed diner chain. Competitors include IHOP (DIN), Denny's (DENN). Market share data is not publicly available at a granular level for individual FAT Brands restaurants, but within the broader diner market, the aforementioned chains have significant shares.
• Round Table Pizza: Pizza chain known for its quality ingredients. Competitors include Domino's (DPZ), Pizza Hut (YUM), and Papa John's (PZZA). Market share data is not publicly available at a granular level for individual FAT Brands restaurants, but within the broader pizza market, the aforementioned chains have significant shares.
• Twin Peaks: Sports lodge restaurant chain. Competitors include Tilted Kilt, Hooters.

Industry Overview

The restaurant industry is highly competitive, with trends including increasing demand for online ordering, delivery services, and healthier menu options. The industry is impacted by economic conditions and consumer spending habits.

Positioning

FAT Brands positions itself as a multi-brand restaurant franchisor, aiming to grow through acquisitions and expanding its existing franchise network. Its competitive advantage lies in its diversified portfolio of brands.

Total Addressable Market (TAM)

The global restaurant market size is substantial, estimated in the trillions of dollars. FAT Brands' TAM is the addressable portion of the market that its franchises can penetrate. The market is expected to continue growing. FAT Brands is positioned to grow by acquiring additional franchises and increasing market share through existing restaurants.

Key Competitors

• MCD
• YUM
• RBI
• DENN

Competitive Landscape

FAT Brands faces intense competition from larger, more established restaurant chains with greater financial resources and brand recognition. FAT Brands' competitive advantage lies in its diversified portfolio and franchise-based model, allowing for rapid expansion. However, it struggles with consistent brand oversight.

Global Franchise Group

• Year: 2021
• Acquisition Price (USD millions): 300
• Strategic Rationale: Expanded FAT Brands portfolio with established brands like Round Table Pizza, Great American Cookies, and Marble Slab Creamery, adding significant franchising and manufacturing capabilities.

Historical Growth: FAT Brands' growth has primarily been driven by acquisitions of restaurant chains. Organic growth within existing brands has been a secondary focus.

Future Projections: Future growth is expected to continue through acquisitions, franchise expansion, and same-store sales growth. Analyst estimates vary, requiring review of recent reports.

Recent Initiatives: Recent initiatives include acquiring new brands and expanding the franchise footprint of existing brands, and strategic partnerships to boost performance.

FAT Brands is a growing company in the restaurant franchising space, leveraging acquisitions to expand its portfolio. Its strength lies in its diversified brand holdings. However, high debt levels and inconsistent brand management pose challenges, and external threats of market competition and rising costs need to be carefully managed to ensure stable growth and profitability.

Data Sources:

• Company filings (SEC)
• Market research reports
• Industry analysis websites

Disclaimers:

This analysis is based on publicly available information and should not be considered financial advice. Market conditions and company performance are subject to change. Market share data provided is based on estimates and may vary.