FATBB

• Legal matters: U.S. Department of Justice dismissed all charges against FAT Brands and others. Delaware derivative cases resolved with a settlement including $10 million insurance payment and share contribution.
• Twin Hospitality Group: Gaining momentum under Kim Boerema's leadership, with strategic hires like Ken Brendemihl as Smokey Bones President and Melissa Fry as Chief Marketing Officer.
• Strategic pillars:
  • Organic expansion: Opened 13 new locations in Q3, 60 YTD with a target of 80 new openings in 2025; strong development visibility with over 190 franchise development agreements YTD; co-branding as a key growth driver, e.g., first co-branded Roundtable Pizza and Fatburger location in California; international expansion with Johnny Rockets opening 7 new locations and Fatburger returning to Japan.
  • Growth by acquisition: Disciplined approach, focusing on acquisitions that enhance core brands; Georgia production facility generating $9.6 million in sales and $3.8 million in adjusted EBITDA in Q3 with 39.6% margin.
  • Manufacturing scale-up: Partnership with virtual dining concepts to make Great American Cookies available for delivery from Chuck E Cheese locations.
• FAT Brands Foundation: Awarded 42 grants and over $170,000 in funding so far in 2025; launched health and wellness campaign.

• Hopes to resolve debt restructuring this quarter, with proceeds from Twin Peaks equity raise to be used for reducing debt once the government opens.
• Fazoli's refranchising making material progress with proposals being evaluated.
• New store target reduced to 80 in 2025 due to slowdown in franchisee store opening pace.
• Continue SG&A cost optimization across the board, including staff and executive reductions, office closures, and shared services consolidation.

Total revenues were $140 million, a 2.3% decrease from $143.4 million in the previous year's quarter. General and administrative expense increased $8.2 million to $42.7 million in the quarter. Cost of restaurant and factory revenues decreased to $94.6 million, but was partially offset by wage and food cost inflation. Net loss attributable to FAT Brands was $58.2 million or $3.39 per diluted share. Adjusted EBITDA for the quarter was $13.1 million compared to $14.1 million in the year-ago quarter. The casual dining segment showed strong results with same-store sales growth of 3.9%.

• Restaurant industry headwinds affecting same-store sales and overall performance.
• Slow pace of new store openings due to franchisee foot-dragging, resulting in potential loss of royalties.
• Economic environment impacting franchisees' ability to open stores and overall business operations.

Q: Joe Gomes asked about the timing of the debt restructuring.

A: Andrew Wiederhorn said hopeful to resolve this quarter, with the proceeds from the Twin Peaks equity raise to reduce debt held up only by the government shutdown.

Q: Joe Gomes asked about Twin Peaks underperforming Smokey Bones locations.

A: Some underperforming stores in a master lease, will end once the master lease is sorted out and extended.

Q: Joe Gomes asked about the effort for refranchising the Fazoli units.

A: Made material progress, evaluating proposals received and deciding whether to move forward or continue negotiating.

Q: Joe Gomes asked about the new store target of 80 in 2025.

A: Slowdown in the pace of new store openings due to franchisee foot-dragging, with stores slipping into next year.

Q: Joe Gomes asked about the $10 million SG&A reduction.

A: Across the board, including staff reductions, executive reductions, office closures, and consolidation of accounting departments for shared services.

Q: Roger Lipton asked about casual dining chains in the segment.

A: Hurricane Grill & Wings, Buffalo's Cafe, Native Grill & Wings, Ponderosa and Bonanza Steakhouses.

Q: Roger Lipton asked about Twin Peaks' next year opening program.

A: Number of new stores slated to convert Smokey Bones conversions into Twin Peaks as corporate and franchise, and new franchise locations under development, with focus on restaurant level margins improvement