Missed obligations and lenders’ demands for immediate repayment have pushed Beverly Hills-based franchiser Fat Brands Inc. and its affiliate, Twin Hospitality Group Inc., into bankruptcy.
Fat Brands – an acronym for “Fresh. Authentic. Tasty” – operates 18 restaurant brands, including Johnny Rockets, Fatburger and Twin Peaks, with 2,200 locations worldwide. The company began voluntary Chapter 11 proceedings on Jan. 26 to “deleverage the balance sheet” and restructure after struggling to service its $1.4-billion debt.
Fat Brands’ portfolio of fast-casual burger and bar chains will continue to operate during the restructuring process, the company said in a statement, though the company has recently shuttered some locations under its umbrella of brands. In 2025’s third quarter, it closed 11 underperforming restaurants that were part of barbecue chain Smokey Bones.
“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,” Chief Executive Andy Wiederhorn said in a statement.
Pointing to Fat Brands’ $60 million in free cash flow, Wiederhorn insisted on the company’s viability at an investors conference in early January.
“We just need the debt stack restructured to be affordable,” Wiederhorn said. According to Nation’s Restaurant News, he added that the process had been complicated by the involvement of 25 investors or note holders struggling to agree on a single solution.
In a Jan. 27 bankruptcy filing, the company’s restructuring head Joe DiDonato wrote that efforts to shore up liquidity through new debt or equity failed amid weak appetite for restaurant stocks.
Fat Brands stock closed at $0.22 last Thursday after tumbling over 90% since a peak of $2.30 last September. With shares falling below $1 for more than 30 consecutive days, the company on Jan. 8 received a delisting warning from Nasdaq, with a compliance deadline of early July.
Knocks at the door
Most of the Fat Brands’ debt comes from a series of whole business securitizations it used to fund aggressive growth through acquisitions in 2020 and 2021, pledging nearly all its assets and cash flows as collateral. The financing left the company with limited liquidity and breathing room in the case of rising costs and softened revenue.
As repayment lagged, creditors began asking for the debt back immediately in full.
In a recent blow, bondholders with one of Fat Brands’ lenders, UMB Bank, accelerated nearly $160 million in secured debt and $9.9 million in interest, a November filing shows. The company didn’t have the needed cash on hand, leaving bankruptcy as the only option to stop UMB from taking control of key cash flows and voting rights tied to a 22.5% equity stake.
News of the debt acceleration came with a leadership change. James Ellis, former Fat Brands director, announced on Nov. 25 his immediate resignation from the role. His departure was “due to personal reasons,” and not driven by a disagreement with company ownership, according to the same filing.
The shuffle wasn’t the first in the company’s recent history. In March 2023, Wiederhorn stepped down as chief executive on the heels of a federal investigation targeting him and Fat Brands for fraud, money laundering and tax evasion.
The U.S. Justice Department dropped all criminal charges against Wiederhorn and the company last July, months after President Donald Trump’s administration fired the federal prosecutor on the case.
Wiederhorn reassumed Fat Brands’ top operating role last September, promising to “deliver on the company’s strategic priorities,” NRN reported.
