Twin Hospitality Closes 15 Underperforming Smokey Bones Restaurants, Converts 19 Units to Twin Peaks

Twin Hospitality is closing 15 underperforming Smokey Bones restaurants, 10 of which have already shuttered, with the remaining five to close by Q3. The closures are part of a strategic review of the Smokey Bones portfolio, which identified 19 restaurants for conversion to Twin Peaks. The company aims to support remaining profitable Smokey Bones restaurants and leverage FAT Brands' franchise model to unlock growth potential.

Twin Hospitality Group has announced the closure of 15 underperforming Smokey Bones restaurants, with 10 locations already closed and five more slated to close by the end of the fiscal third quarter. This decision is part of a strategic review aimed at optimizing the Smokey Bones portfolio, which identified 19 restaurants for conversion into better-performing Twin Peaks lodges. The company expects these closures to enhance EBITDA performance by removing approximately $1.5 million in associated corporate overhead [1].

The Smokey Bones brand, while significantly reduced, will continue under the leadership of Ken Brendemihl, who has been named president of the BBQ chain. Brendemihl brings over 25 years of restaurant leadership experience, most recently serving as chief operating officer at Alamo Drafthouse [1]. The remaining 26 Smokey Bones locations are generating positive cash flow and contributed approximately $3.0 million to total EBITDA on a trailing 12-month basis, with AUVs ranging from $1.3 to $7.1 million and healthy unit-level margins [1]. The company plans to leverage FAT Brands' proven franchise model to begin franchising a portion of the remaining Smokey Bones locations, creating a more balanced corporate-to-franchise mix and unlocking additional growth potential for the brand [1].

Twin Hospitality Group's CEO, Kim Boeremea, stated, "Smokey Bones is a beloved brand that has amassed a loyal following over the years. However, since joining Twin Hospitality, we have launched a full spending review across both brands to eliminate inefficiencies, uncover synergies, and refocus on high-return initiatives. I have also focused on reviewing the Smokey Bones portfolio, closing underperforming units, identifying strong candidates for conversion, and supporting profitable locations that will remain Smokey Bones" [1].

The closures come as Twin Hospitality struggled in Q1, reporting a total revenue of $87.1 million, down 5.4% year-over-year, a net loss of $12.1 million, compared to $9.2 million last year, and an adjusted EBITDA of $5.1 million, down from $7.1 million [1]. The company has growth plans for its Twin Peaks brand, with two conversions under construction and an additional company-owned conversion in Citrus Park expected to open in early 2026 [1].

FAT Brands Inc., the parent company of Twin Hospitality, is also undergoing a strategic reorganization under the leadership of Andrew Wiederhorn. The company aims to balance aggressive growth with financial discipline, with a focus on organic expansion, targeted acquisitions, and balance sheet strengthening [2]. FAT Brands has implemented a multi-pronged financial strategy to address its high-debt profile, including debt refinancing, cost reductions, and dividend suspension. The company also plans to refinance its remaining securitization silos ahead of their 2026 maturity [2].

References:
[1] https://www.thestreet.com/restaurants/struggling-bbq-restaurant-chain-closing-another-15-restaurants
[2] https://www.ainvest.com/news/fat-brands-strategic-reorganization-post-ceo-return-play-high-debt-high-growth-franchise-sector-2509/