FAT Brands Files for Chapter 11 Bankruptcy on $1.3 Billion Debt

FAT Brands Inc., the parent company of popular restaurant chains including Fatburger, Johnny Rockets, Round Table Pizza and Twin Peaks, filed for voluntary Chapter 11 bankruptcy protection on Monday in the U.S. Bankruptcy Court for the Southern District of Texas. The filing aims to restructure approximately $1.3 billion in debt amid ongoing financial pressures facing the casual dining industry.

The company, which oversees 18 restaurant concepts spanning fast-casual, quick-service and casual dining segments, operates more than 2,300 locations worldwide, the majority of which are franchised. FAT Brands directly owns about 150 sites. Its affiliate, Twin Hospitality Group, which manages the Twin Peaks and Smokey Bones chains and was spun off as a separate public entity earlier this year, also sought Chapter 11 protection in the same court. Court documents estimate both companies' assets and liabilities between $1 billion and $10 billion.

The bankruptcy stems from a default on debt payments tied to a whole business securitization arrangement, where future royalty streams from the brands served as collateral for loans. FAT Brands missed required payments in October, prompting...