Fat Brands, Inc Q3 FY2025 earnings call

Legal Matters: U.S. Department of Justice dismissed all charges against FAT Brands and key individuals. Delaware derivative cases resolved with a $10 million insurance payment and 200,000 Twin Hospitality Group shares contribution. ### Twin Hospitality Group: Gaining momentum under Kim Boerema's leadership. Strategic leadership additions made. Andy Wiederhorn is Chairman. ### Financial Position: Advancing $75M to $100M equity raise at Twin Peaks. Dividend pause preserves cash flow. SG&A reductions over $10M achieved. ### Strategic Pillars: Organic expansion: Opened 13 new locations in Q3, 60 YTD; target 80 new openings in 2025. Focus on co-branding, stand-alone openings, international expansion. 100 remodels planned. Digital sales up 19% YTD. Awards received. Growth by Acquisition: Disciplined approach, focus on complementary acquisitions. Manufacturing Scale-Up: Partnership with virtual dining concepts for Great American Cookies delivery, live at over 450 locations. ### FAT Brands Foundation: Awarded 42 grants, over $170K funding. Launched health and wellness campaign.

The Georgia production facility of FAT Brands generated $9.6 million in sales and $3.8 million in adjusted EBITDA during the third quarter, with a 39.6% margin. It was operating at only 45% of capacity with expansion potential.

Equity Raise: Advancing $75M to $100M equity raise at Twin Peaks to pay down debt and fund new unit development. ### Debt Restructuring: Hopeful to resolve debt restructuring during the current quarter, with equity raise proceeds to help reduce debt. ### Fazoli's Refranchising: Made material progress, evaluating proposals. ### Store Openings: Target of 80 new stores in 2025 due to slowdown in franchisee store opening pace. ### Twin Peaks: New stores slated to convert Smokey Bones locations and new franchise locations in development.

Government Shutdown: Impact on the equity raise for Twin Peaks. ### Slow Store Openings: Franchisees dragging their feet in opening stores, delaying royalty income. ### Economic Impact: Restaurant recessionary environment affecting store openings and operations. ### Master Lease Uncertainty: Uncertainty regarding master lease resolution and extension affecting Smokey Bones store conversions.

Q: Joe Gomes asked about timing of debt restructuring.

A: Andy Wiederhorn said hopeful to resolve during current quarter, held up by government shutdown.

Q: Joe Gomes asked about Smokey Bones underperforming stores.

A: Some underperforming stores in master lease, to be sorted out once master lease is extended.

Q: Joe Gomes asked about Fazoli's refranchising.

A: Made material progress, evaluating proposals.

Q: Joe Gomes asked about 2025 store opening target.

A: Slowdown in store opening pace, stores slipping into next year.

Q: Roger Lipton asked about Twin Peaks opening program.

A: Kenneth Kuick said new stores slated to convert Smokey Bones and new franchise locations in development.

Q: Roger Lipton asked about Twin Peaks store level margins.

A: Andy Wiederhorn said Kim Boerema focused on restaurant level margins, expecting improvement as initiatives kick in.