FAT Brands, the multi-brand restaurant franchisor behind concepts such as Fatburger, Johnny Rockets, and Twin Peaks, has filed for Chapter 11 bankruptcy protection in the U.S., alongside its Twin Peaks affiliate.
The filing follows mounting financial and legal pressure and marks a major balance-sheet reset for one of the most aggressive consolidators in franchising over the past decade.
The bankruptcy is not driven by a sudden collapse in store-level demand. Instead, it reflects the cumulative impact of financial strategy decisions made during a rapid expansion phase.
At the time of filing, FAT Brands carried more than $1 billion in debt, much of it fixed and inflexible.
3 factors stand out as the primary drivers behind the restructuring:
1. Aggressive debt-funded acquisitions.
FAT Brands expanded quickly by acquiring large franchise systems over a short period, including Global Franchise Group and Twin Peaks.
These deals were financed primarily with debt rather than equity, materially increasing leverage and leaving little margin for operating volatility.
FAT Brands increased its debt from roughly $31 million in 2019 to more than $1 billion by 2025 as it financed a string of strategic acquisitions.
Key deals include Johnny Rockets (2020), Global Franchise Group and Twin Peaks (2021), Nestlé Toll House Café (2022), and Smokey Bones (2023).
2. Heavy reliance on securitized royalty debt.
Instead of traditional bank financing, FAT Brands used whole-business securitizations backed by franchise royalty streams.
While this structure supported rapid growth, it also created rigid payment obligations tied to long-term cash-flow assumptions.
3. Rising rates and concentrated debt maturities.
Much of the company’s debt was issued in a low-rate environment. As interest rates rose and certain payments were missed, creditors accelerated maturities, turning long-dated obligations into near-term liquidity problems and forcing a court-supervised restructuring.
FAT Brands has stated that restaurants will continue operating during the Chapter 11 process.
The filing is best viewed as a financial reorganization, not an operational shutdown—but it serves as a clear reminder of how leverage, complexity, and capital structure risk can compound quickly in franchise roll-up strategies.
Woof Gang Bakery & Grooming has opened its 300th location in Florida, marking a major systemwide milestone for the pet services franchise.
The brand combines premium grooming with specialty pet retail, and this latest milestone reflects continued demand in the pet care category — a segment that benefits from stable recurring consumer spending.
Reaching 300 units underscores Woof Gang’s scalability and the potential strength of pet-focused concepts for franchise investors looking at service categories with resilient fundamentals.
Hungry Howie’s is accelerating its presence in the Detroit market with three new store openings and plans for an additional campus-area location in the near future.
The strategy reflects focused expansion within a core metropolitan area — leveraging brand strength and operational familiarity to deepen market penetration rather than expanding solely into new states.
This type of clustered growth can drive efficiencies in marketing, deliveries, and local supply, offering franchise investors potential advantages in brand awareness and unit performance.
Tommy’s Express expands into another San Antonio location, marking the eighth Tommy’s Express site in the metro area.
The new location was carefully designed with a focus on sustainability and customer experience, incorporating modern building features and efficient wash technology.
This expansion reflects Tommy’s Express’s strategy of building dense, metro-level footprints, allowing franchise operators to strengthen brand awareness and operational efficiency within established markets.
Woof Gang Bakery & Grooming provides premium pet grooming services and high-quality pet products, ensuring that pets look and feel their best.
?
?
Hungry Howie's Pizza is a pizza delivery and carryout franchise that offers flavored crust pizza options and various toppings, providing a flavorful and customizable pizza experience for customers.
?
?
Car wash franchise featuring high-speed, express car wash facilities with advanced technology and a focus on speed, convenience, and quality.
?
?
Sports lodge franchise combining sports viewing with made-from-scratch food, craft beer, and scenic views, creating a lively and entertaining dining experience.
?
?
Classic American diner franchise serving hamburgers, shakes, and retro-themed comfort food, providing a nostalgic dining experience with a 1950s atmosphere.
?
?
KEEP READING
?
?
?
?
?
?
?
?
?
?
?
?
?
.png)