Fat Brands files for Chapter 11 as debt crisis deepens and stock collapses
Fat Brands Inc., the owner of popular chains like Johnny Rockets, Fatburger, and Round Table Pizza, has filed for Chapter 11 bankruptcy protection. The company pointed to unexpected market challenges as the main reason for its financial troubles. Its shares have also plummeted by nearly 90% in just three months.
The bankruptcy filing took place in the U.S. Bankruptcy Court for the Southern District of Texas. Fat Brands, which operates 18 restaurant brands across more than 2,200 locations, has struggled under a debt load exceeding $1 billion. Over 90% of its restaurants are franchised.
Earlier this month, the company received a delisting notice from Nasdaq after its stock price collapsed. The sharp decline followed months of financial strain, leaving Fat Brands with few options.
Founder Andrew Wiederhorn had previously faced scrutiny in 2022 over alleged tax fraud. Though charges were later dropped, the investigation added to the company's public challenges.
Fat Brands now faces restructuring under Chapter 11 protection. The process will determine how its debt and operations are managed moving forward. The outcome will also impact its thousands of franchised locations worldwide.
