FAT Brands Inc. (FAT): BCG Matrix [Dec-2025 Updated]

You're looking for a clear, unvarnished view of FAT Brands Inc.'s portfolio, and honestly, the BCG Matrix is the perfect tool to map their brands against the backdrop of their massive $1.3 billion debt load. This analysis cuts straight to where the action is: Twin Peaks is clearly a Star, while legacy brands like Smokey Bones are dragging down the system-wide same-store sales decline of 3.5% in Q3 2025. We'll show you which units are generating the steady cash flow-like Round Table Pizza-and which ones, like the promising but capital-hungry Great American Cookies, are burning cash while sitting in the Question Mark quadrant, especially given the $58.2 million net loss last quarter. Dive in to see exactly where FAT Brands needs to invest, hold, or divest to manage that significant debt.

Background of FAT Brands Inc. (FAT)

FAT Brands Inc. is a multi-brand restaurant franchising company that develops, markets, and acquires concepts across the quick service, fast casual, casual dining, and polished casual dining sectors globally. You know the names; the portfolio includes major players like Fatburger, Twin Peaks, Round Table Pizza, Johnny Rockets, Great American Cookies, and Fazoli's, among others. The company generally operates as a franchisor, collecting initial franchise fees and ongoing royalties, though it does directly own and operate some locations for certain brands.

Looking at the most recent snapshot, the third quarter of fiscal 2025, which ended on September 28, 2025, showed some headwinds. Total revenue for that quarter came in at $140.0 million, marking a 2.3% decrease compared to the same period last year. System-wide sales across the entire portfolio saw a decline of 5.5% for the quarter. Honestly, the bottom line reflected these pressures, with the company reporting a net loss attributable to FAT Brands of $58.2 million, which translated to a loss of $3.39 per diluted share. The adjusted EBITDA for the quarter was reported at $13.1 million, down from $14.1 million in the prior year period.

Still, there were pockets of operational strength you should note. The overall same-store sales (SSS) decline narrowed to 3.5%, which was an improvement from the second quarter. More specifically, the casual dining segment actually posted a 3.9% increase in same-store sales growth, which is a concrete positive sign for brands like Twin Peaks. To address the balance sheet, management is actively pursuing strategic initiatives, including negotiating debt restructuring and planning for a $75 million to $100 million equity raise at Twin Hospitality Group to reduce leverage. Furthermore, a key move involves the plan to re-franchise 57 company-owned Fazoli's restaurants.

FAT Brands Inc. (FAT) - BCG Matrix: Stars

You're looking at the brands within FAT Brands Inc. (FAT) that are currently dominating high-growth areas of the market, demanding significant capital to maintain that lead. These are the engines showing the strongest current momentum, which is why they are positioned as Stars in the BCG framework.

Twin Peaks, operating under the Twin Hospitality Group, is demonstrating clear market strength within the casual dining space. The segment posted a same-store sales (SSS) growth of 3.9% for the third quarter of fiscal year 2025. This performance signals strong consumer demand and market share gains in a growing category. To fuel this momentum and address balance sheet needs, FAT Brands is advancing plans for a substantial capital infusion specific to this brand.

The financial commitment to this high-growth asset is clear:

• Planned equity raise at Twin Hospitality Group targeted between $75 million and $100 million.
• Proceeds are earmarked to pay down debt and fund new unit development.
• A dividend pause is preserving an estimated $35 million to $40 million in annual cash flow.

Also showing significant potential is the internal strategy of co-branding, which leverages existing real estate for incremental sales. The initial dual-branded Round Table Pizza and Fatburger location in California validated this approach dramatically. This test unit more than doubled the weekly sales and transactions compared to its prior standalone Round Table Pizza format. The pipeline for this strategy is robust, with approximately 50 additional co-branded locations in development across the portfolio.

International expansion for core concepts like Fatburger represents another high-growth vector that requires investment to capture market share globally. The brand is aggressively pursuing new territories:

• New partnership in France targets 30 units over the next three years.
• Five of those French units are set to open in 2026.
• Relaunch in Japan is underway, with the inaugural outlet scheduled before the end of 2025.
• The Japan plan includes four restaurants in Okinawa by 2030.

Here is a snapshot of the key performance and investment metrics associated with these Star brands as of the third quarter of 2025:

These Stars are consuming cash to maintain their high growth rates, which is the expected trade-off for securing future market leadership. Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - BCG Matrix: Cash Cows

Round Table Pizza delivered a modest yet positive 0.6% positive same store sales increase in the first quarter of 2025. Digital sales at Round Table Pizza climbed 5% sequentially from Q4 2024 to Q1 2025.

The core franchise royalty stream model supports over 2,300 units worldwide across the FAT Brands Inc. portfolio. Royalty revenue in Q1 2025 was $21.8 million compared to $21.9 million in the prior year period.

The dough factory operations, which produce Pretzel mix and Cookie Dough, generated $9.6 million in sales in Q2 2024, contributing $3.8 million to Adjusted EBITDA in that quarter, a 9.3% increase year-over-year. Cost of restaurant and factory revenues in Q3 2025 totaled $94.6 million, a decrease of 2.3% from $96.8 million in the year-ago quarter. The company is pursuing strategic partnerships to strengthen manufacturing capabilities, following a third-party contract execution expected in Q2 2025 for Great American Cookies production.

The overall franchising structure provided a revenue base despite a decline in the third quarter of 2025. The total revenue for Q3 2025 was $140.0 million, a 2.3% decline from $143.4 million in Q3 2024. The dividend pause remains in effect, preserving $35-$40 million in annual cash flow.

Here's the quick math on key Q3 2025 financial metrics:

The stability of the franchise model is reflected in the following unit and growth statistics:

• Total units owned and franchised worldwide: approximately 2,300.
• Casual dining segment same-store sales growth in Q3 2025: 3.9%.
• New restaurants opened year-to-date Q3 2025: 60.
• Committed locations expected to contribute incremental EBITDA: approximately 900.
• Expected incremental EBITDA from committed locations: $50-$60 million.

Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - BCG Matrix: Dogs

You're looking at the brands within FAT Brands Inc. (FAT) that are stuck in low-growth markets and have low relative market share, which is the classic definition of a Dog in the Boston Consulting Group Matrix. These units often tie up capital without offering significant returns, making them prime candidates for divestiture or aggressive restructuring. Here's the quick math on what's currently weighing on the portfolio as of the third quarter of 2025.

Smokey Bones is a clear example of a brand requiring significant, and costly, attention. The company incurred a direct $6.9 million store closure cost in the third quarter of 2025, which hit the General and Administrative expense line. This action was part of a larger strategic move, where 11 underperforming locations were closed, and two others were temporarily shut down for conversion into the higher-performing Twin Peaks concept. This indicates that the existing footprint for Smokey Bones was not generating sufficient cash flow to justify continued operation in its current state.

The broader portfolio health, which reflects the low-growth environment for several concepts, is evidenced by the system-wide same-store sales (SSS) performance. For the third quarter of 2025, the overall system-wide SSS declined by 3.5%. While the casual dining segment posted a 3.9% increase, the overall negative number suggests that a significant portion of the portfolio, likely including the legacy brands, is operating in declining or stagnant markets, fitting the low-growth characteristic of a Dog.

The legacy brands, specifically Ponderosa and Bonanza Steakhouses, represent units operating in highly mature segments where competitive advantage is minimal. As of December 2024, the combined US footprint for these two concepts had shrunk to just 15 locations (12 Ponderosa and 3 Bonanza). This minimal presence in a mature segment suggests low growth prospects and a low market share relative to the overall FAT Brands portfolio.

Furthermore, the financial structure of FAT Brands Inc. itself shows cash being consumed by debt service, which limits the ability to fund necessary turnarounds or strategic pivots for these struggling units. The total other expense, net, for the third quarter of 2025 was $41.0 million, which included a quarterly interest expense of $41.5 million. This high quarterly interest payment consumes cash flow that, frankly, could be better deployed elsewhere.

Here is a snapshot of the financial indicators pointing toward the Dog classification for certain segments:

When you look at the portfolio through this lens, the action plan for Dogs becomes clear. Expensive turn-around plans are generally avoided because the market dynamics are already unfavorable. Instead, the focus shifts to minimizing exposure, which is what we see with the Smokey Bones closures and conversions.

The strategic implications for these low-growth, low-share assets are:

• Divestiture of the remaining 15 US Ponderosa/Bonanza units is a logical next step.
• Continued conversion of underperforming assets, like the 11 Smokey Bones locations closed in Q3 2025, to higher-growth concepts like Twin Peaks.
• Minimizing capital allocation to brands that do not show immediate, high-return potential.
• Managing the high fixed cost burden, such as the $41.5 million quarterly interest, to free up cash.

Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - BCG Matrix: Question Marks

These units operate in markets showing strong expansion potential but currently hold a smaller slice of that market. They require capital to fuel growth, which can strain current cash flow, a classic characteristic of Question Marks.

The future growth engine for FAT Brands Inc. is heavily reliant on its development pipeline. This pipeline represents significant future revenue potential but demands current investment without immediate, proportional returns. You are looking at a commitment to build out capacity now for returns later. Specifically, the pipeline includes approximately 900 committed locations, which are expected to generate $50-$60 million in incremental EBITDA once they are fully ramped up. This is supported by a broader figure of approximately 1,000 signed agreements as of Q1 2025. The company secured over 190 franchise development agreements year-to-date as of Q3 2025, showing continued franchisee interest in this expansion.

Consider the brand Great American Cookies. It shows clear signs of consumer engagement, which is a positive indicator for a growing market. Loyalty-driven sales for Great American Cookies were up 40% in Q2 2025. Furthermore, digital sales now make up 25% of that brand's total revenue. However, its position in the overall dessert category suggests a relatively low market share, placing it squarely in this quadrant-high growth potential, but not yet a market leader.

The strategic direction for Fazoli's highlights a high-risk, high-reward capital allocation choice. FAT Brands Inc. is advancing plans for the re-franchising of its 57 corporate-owned Fazoli's restaurants. This move is designed to shift the asset base toward a nearly 100% franchised model, freeing up capital and reducing direct operational burden, but it requires successful execution of store dispositions.

The overall financial context for FAT Brands Inc. in Q3 2025 underscores the cash-consuming nature of these growth bets. The company reported a GAAP net loss of $58.2 million, or a loss of $3.39 per diluted share, for the third quarter ended September 28, 2025. This loss widened from a net loss of $44.8 million in the prior year period. To manage this, the dividend pause remains in effect, preserving $35-$40 million in annual cash flow, and the company is advancing plans for a $75-$100 million equity raise at Twin Hospitality Group Inc. to pay down debt and fund new unit development.

Here's a quick look at the Q3 2025 financial snapshot that reflects the cash demands:

These figures show a business unit that is actively spending to support its structure and future pipeline, resulting in a significant GAAP loss. The strategy requires heavy investment to quickly move these brands from Question Marks into Stars, or they risk becoming Dogs.

The immediate actions required to support these high-growth, low-share brands include:

• Focus on increasing market share quickly for key brands.
• Execute the planned $75-$100 million equity raise at Twin Hospitality Group Inc.
• Finalize the re-franchising of the 57 corporate-owned Fazoli's restaurants.
• Monitor the pipeline of approximately 900 committed locations for on-time opening.