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FAT Brands: The Growing Attraction Of Multi-Unit Franchising

Apr. 11, 2021 4:44 PM ETFAT Brands Inc. (FAT)3 Comments
Steve Crichlow profile picture
Steve Crichlow


  • FAT Brands reported year-end results, showing great progress in spite of pandemic.
  • With about 700 locations among their franchised brands, a critical mass has been reached.
  • The Company has responded well to the demands of Covid-19.
  • The pieces are in place, operationally and financially, to more than double '19 Adjusted EBITDA.

Fatburger restaurant, Las Vegas
Photo by anderm/iStock Editorial via Getty Images

Overview – Multi-branded franchisors have a long term competitive advantage

Our overriding thesis is that, within the highly competitive restaurant industry, franchisors that control more than one brand have an important competitive advantage. As all

This article was written by

Steve Crichlow profile picture
Over 40 years of restaurant operations experience including being a multi-unit franchisee at Burger King, Popeyes , Sonic Drive-In and CiCis Pizza. The past eleven years as an Independent Research Provider for various investment firms. Long-time member of the National Restaurant Association.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (3)

bazooooka profile picture
Warrants have been a home-run.
bazooooka profile picture
Those that want a small speculative play should look at their warrants; they've run but maybe some juice left.
Richard Lejeune profile picture
Thanks for the article on FAT. The company is making progress in some areas. I like their multi-franchising model and am partial to Johnny Rockets.

To be fair however, there are some risks that should be mentioned. FAT got a "substantial doubt" opinion from their auditors in the 2020 10K report that was recently released. Fog Cutter Capital was running on fumes with less than 50K in cash before it merged with FAT. I think Fog Cutter would have gotten a "substantial doubt" opinion from their auditors if not for the merger / rescue from FAT.

FAT cash was down by about half from Q3 to Q4 and was last reported as only $7 million. They might need to raise capital which could dilute shareholders. While I think FAT management is doing a good job in some areas during the pandemic, investors should be aware of the CEO's colorful history including a criminal record.

Disc: No position in FAT / FATBP. I cover FATBP as a Watch List issue for the Panick High Yield Report (Seeking Alpha Marketplace)
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