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- **Legal Resolution and Savings**:** DOJ dismissal and derivative case resolution save $30M+ annually. $10M+ SG&A reductions achieved, targeting more through restaurant cost optimization.
- **Operational Momentum**:** 3.5% same-store sales decline narrowed from 4.2%. Casual dining segment grew 3.9%. Digital sales up 19% YoY. Twin Peaks EBITDA margin 17%.
- **Strategic Growth**:** 13 new units Q3, 60 YTD. 190 franchise agreements signed for 900+ future units. Virtual Dining Concepts partnership to expand Great American Cookies to 500+ Chuck E. Cheese locations.
- **Manufacturing Scale-Up**:** Georgia facility at 45% capacity, generating $3.8M EBITDA. Exploring partnerships to boost utilization.
- **Debt Restructuring Progress**:** Twin Peaks equity raise ($75-$100M) pending government reopening. Noteholders restructuring nearing resolution. Targeting positive cash flow in coming quarters.
- **Co-Branding Success**:** First co-branded Round Table + Fatburger location saw 100% sales growth. 50+ co-branded locations in pipeline. Fatburger re-entering Japan with 4 Okinawa units (first opening Q4 2025).

**【CEO Opening Remarks】**
- **Legal Resolution and Leadership Transition**:** DOJ dismissed all charges against FAT Brands and key executives. Derivative lawsuits resolved with $10M insurance payout and 200K Twin Hospitality shares. Andy Wiederhorn reassumed CEO role, with Ken Kuick focusing on CFO duties.
- **Financial Improvement**:** Adjusted EBITDA of $13.1M, narrowed same-store sales decline to 3.5% (from 4.2%), casual dining segment grew 3.9%. Digital sales up 19% YoY.
- **Strategic Initiatives**:** 13 new units opened Q3, 60 YTD, targeting 80 by year-end. 190 franchise agreements signed for 900+ future units. Co-branded locations (e.g., Round Table + Fatburger) saw 100% sales growth. Virtual Dining Concepts partnership to expand Great American Cookies delivery to 500+ Chuck E. Cheese locations.
- **Manufacturing Growth**:** Georgia facility generated $3.8M EBITDA (39.6% margin) at 45% capacity. Exploring further partnerships to boost utilization.
- **Balance Sheet Strengthening**:** $75-$100M Twin Peaks equity raise planned to reduce debt. $35M+ annual savings from dividend pause and legal resolution. $10M+ SG&A reductions achieved, targeting more through restaurant cost optimization.

**【CFO Financial Commentary】**
- **Q3 Financials**:** Total revenue $140M (-2.3% YoY). Adjusted EBITDA $13.1M (-7% YoY). Net loss $58.2M ($3.39/share). G&A up 24% YoY due to store closure reserves and Twin Hospitality listing costs.
- **Cost Management**:** Food/wage inflation offset by lower same-store sales. ADRs down 10% YoY. Restaurant-level margins improving (e.g., Twin Peaks at 17%).
- **Debt Restructuring**:** Equity raise for Twin Peaks pending government reopening. Noteholders restructuring discussions ongoing. Targeting positive cash flow in coming quarters.

**【Q&A Highlights】**
- **Debt Restructuring Timing**:** Equity raise for Twin Peaks contingent on government reopening. Noteholders restructuring nearing resolution. $10M+ annual savings from legal resolution.
- **Store Closures**:** 11 Smokey Bones closures completed. Remaining closures tied to underperforming leases; no immediate plans beyond Q4.
- **Refranchising Progress**:** Fazoli’s refranchising in advanced stages; 100+ units targeted for conversion.
- **2025 Growth**:** 80 new units target (down from 100) due to franchisee delays. 190 franchise agreements signed for 900+ future units. Virtual Dining Concepts partnership to drive $50-$60M incremental EBITDA.
- **Restaurant Industry Challenges**:** 3.5% same-store sales decline reflects broader industry headwinds. Focus on cost optimization (e.g., G&A reductions, menu price adjustments) to mitigate margin pressure.

**【Operational Wins】**
- **Co-Branding Success**:** First co-branded Round Table + Fatburger location saw 100% sales growth. 50+ co-branded locations in pipeline. First Fatburger + Buffalo’s Express in Oklahoma.
- **International Expansion**:** 7 new units opened in Iraq, Chile, UAE, Mexico, Brazil. Fatburger to re-enter Japan with 4 Okinawa locations (first opening Q4 2025).

FAT Brands Inc.(FAT)-20251106-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FATBB

FATBB fundamentals

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