FAT Brands enters bankruptcy

April 2026 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

April 2026 Issue

In late January, FAT Brands, the parent of Fatburger, Johnny Rockets, Round Table Pizza and Twin Peaks, filed for Chapter 11 protection amid a mounting debt load built up through recent acquisitions. The petitions were submitted on 26 January 2026 in the US Bankruptcy Court for the Southern District of Texas, with joint administration requested for FAT Brands, Twin Hospitality and their affiliates.

The Beverley Hills-based franchisor said its 18 brands and more than 2200 locations worldwide are expected to remain open during restructuring. The company stated that the process is intended to deleverage the balance sheet and support long-term growth.

Court filings list estimated assets and liabilities in the range of $1bn to $10bn across the debtor entities. The petitions seek joint administration covering Twin Hospitality and operating subsidiaries such as Fazoli’s, Round Table Pizza, Johnny Rockets, Smokey Bones and Fatburger. FAT Brands said it had explored “strategic alternatives, including restructuring options” and concluded that Chapter 11 was in stakeholders’ best interests.

“Our dynamic portfolio of brands has demonstrated tremendous resilience in a challenging restaurant operating environment over the last few years,” said Andy Wiederhorn, chief executive of FAT Brands. “We are well positioned for long-term profitability and growth. The chapter 11 process will provide us with the opportunity to strengthen our capital structure to support our concepts and ensure they remain at the forefront of their sectors.

“We plan to use this process to connect with key stakeholders around a value-maximizing plan and will act prudently to remain steadfast in upholding and protecting stakeholder interests. Our focus in this process remains providing quality service to our customers and supporting our franchise partners and the over 45,000 corporate and franchise employees,” he added.

Following the filing, Nasdaq notified FAT Brands and Twin Hospitality that their securities would be suspended at the opening on 4 February 2026 and delisted thereafter, citing bankruptcy and public interest concerns. FAT Brands said it would not appeal and expects trading to transition to the OTC Pink Limited Market. The company had previously received compliance warnings after prolonged periods with a share price below $1.

The filing came after a turbulent period in which creditors accelerated roughly $1.26bn of securitised debt in November 2025, a sum the company acknowledged it could not repay with cash on hand. Earlier in January, Mr Wiederhorn told investors that much of the debt sat at subsidiaries rather than the parent and noted ongoing talks with bondholders to restructure obligations. The 2025 spin off of Twin Peaks and Smokey Bones into Twin Hospitality was framed as part of a broader deleveraging strategy.

Legal pressure intensified days before the filing when the company’s largest bondholder, Investor 352 Fund (also known as 352 Capital), sued FAT Brands for $109m and demanded delivery of promised Twin Hospitality class B shares pledged as collateral. The dispute centres on control rights linked to Twin Peaks.

The company also faced a three year federal criminal investigation into Mr Wiederhorn for alleged fraud and money laundering. He has called the probe a “gigantic waste of $75 million”. Prosecutors dismissed all criminal charges in late July 2025, although separate Securities and Exchange Commission civil proceedings remain pending.

Since entering Chapter 11, the case has grown more contentious. A creditor group holding about $990m of debt has sought to suspend Mr Wiederhorn over a post petition stock sale at Twin Hospitality, and 352 Capital has sued to block FAT Brands’ use of securitisation receivables and management fees as cash collateral during restructuring. Outcomes of those motions will shape governance and liquidity as mediation continues.

Going forward, Mr Wiederhorn has said the company will use the bankruptcy process to “optimize our capital structure, reduce debt obligations, and enhance our financial flexibility to support future growth”.

Richard Summerfield