Beverly Hills franchisor Fat Brands Inc. has enjoyed a significant rise in its share price since the start of the year.
Since Jan. 1, its stock has jumped 48%, a gain of $2.89 per share. This includes a nearly 17% bump in February. Shares closed at $9.18 on Feb. 15.
Franchise growth has likely been a driver of this boost.
Most recently, the company announced last week that its ice cream brand, Marble Slab Creamery, had secured a development deal to open 40 new locations throughout Canada, in partnership with Canadian Ice Cream Co. That deal will bring the brand’s total store count to 140.
“We are very pleased with the continued market growth in Canada with our experienced master franchise partner,” Taylor Wiederhorn, chief development officer for Fat Brands, said in a statement. “Since entering the country nearly 20 years ago, Marble Slab Creamery has made a name for itself. Our homemade ice cream and unlimited mix-in philosophy resonate with fans and our franchisees as we continue to expand the concept across Canada and the world.”
Those 40 new franchises are expected to be opened throughout the next decade. Share prices fluctuated following the Feb. 12 announcement but remained down just 2 cents on Thursday.
Other Fat Brands acquisitions
In other growth news, the company in September acquired Smokey Bones Bar & Fire Grill, a Florida-based chain with 61 restaurants, for $30 million. Fat Brands founder Andrew Wiederhorn told investors in October that he expects the deal to add $10 million in earnings each year and noted that Smokey Bones had the company’s second highest average unit volume behind its Twin Peaks restaurants.
Wiederhorn added that, as part of Fat Brands’ refranchising strategy, it expects to double Smokey Bones’ location count.
“Adding a strong player in the barbecue space like Smokey Bones provides our sales team with more development options to offer franchise partners so that they can further their new unit growth,” he said during the company’s third-quarter earnings call. “We plan to work hard and hand-in-hand with the Smokey Bones’ leadership team to grow the concept through our franchising model.”
The company opened 30 restaurants in the third quarter and had, through the first three quarters, opened 96. It expects to have opened 150 by the fiscal-year’s end.
Andrew Wiederhorn told the Business Journal in January that California continues to be an important growth market for the company, with Fatburger, Round Table Pizza and Hot Dog on a Stick positioned for the most growth.
