Food & Beverage

Fat Brands closes biggest restaurant franchisor deal this year

Photo: iStock.

July 23, 2021

Fat Brands Inc. has closed a franchisor deal by acquiring Global Franchise Group for $442.5 million from Serruya Private Equity and Lion Capital, a news release said. With the deal, Fat Brands adds five concepts to its portfolio, including Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker. The transaction was funded with cash and stock, including $350 million in cash from newly issued notes and cash on hand, $67.5 million in Series B preferred stock and $25 million in common stock.

The acquisition increases Fat Brands' portfolio from 700 stores to more than 2,000 units globally. The acquisition is expected to increase Fat Brands' annual EBITDA by approximately $40 million to $55 million to $60 million, and increase the company's annual revenues from approximately $36 million to over $100 million.

In addition to adding five new restaurant concepts, the acquisition included a manufacturing facility in Atlanta that supports various Global Franchise Group brands and provides incremental revenue opportunities.

"This acquisition is our largest deal yet, and further diversifies our iconic restaurant portfolio into new restaurant segments and categories," Fat Brands CEO Andy Wiederhorn said in the release. "As our acquisitions have grown from small chains to global restaurants, Fat Brands is poised to better position itself as a multi-concept operator in the franchise restaurant business.

Fat Brands' other notable acquisitions include Johnny Rockets in 2020 and Elevation Burger in 2019. Fat Brands' acquisition strategy has been a pillar of the company's ethos since its launch in 2017 and remains a top priority for management throughout the rest of the year and beyond.

The company also owns Fatburger, Johnny Rockets, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses.