FAT Brands Inc. (FAT): Business Model Canvas [Dec-2025 Updated]

You're looking at FAT Brands Inc. (FAT) not just as a collection of restaurants, but as a sophisticated brand aggregator whose 2025 playbook is all about scale through franchising and aggressive balance sheet cleanup. Honestly, the core model is asset-light, running a global network of about 2,300 franchised units across over 18 diverse concepts, which generates steady recurring royalty revenue. Still, the near-term risk is clear: servicing the debt load, evidenced by that $41 million interest expense in Q3 2025, while simultaneously trying to integrate a pipeline of nearly 900 committed new locations. To understand the precise mechanics of how they manage high financing costs against franchise fees and factory sales, check out the full, nine-block Business Model Canvas we mapped out below.

FAT Brands Inc. (FAT) - Canvas Business Model: Key Partnerships

You're looking at the backbone of FAT Brands Inc. (FAT)'s growth engine-the partners that make the franchise model work. Honestly, the numbers here tell you where the company is putting its chips for scale and efficiency.

Multi-unit and single-unit Franchisees (operating ~92% of units)

The franchise community is definitely the core of FAT Brands Inc. (FAT). As of the third quarter ended September 28, 2025, the company operated approximately 2,300 units globally, and about 92% of those were franchised. This high franchise ratio is key to their asset-light strategy, meaning less capital tied up in day-to-day store operations.

The development pipeline shows this focus isn't slowing down. They reported a robust pipeline of roughly 1,000 signed franchise deals as of the second quarter of 2025. The goal for 2025 new openings was revised to 80, with 60 opened year-to-date by the third quarter. Looking further out, they have approximately 900 committed locations expected to open over the next 5 to 7 years, which management projects could contribute $50 million to $60 million in incremental EBITDA once fully operational. This is how you build enterprise value in this space.

The co-branding strategy is a major partnership success story with franchisees:

• Co-branded locations (like Marble Slab Creamery and Great American Cookies) grew to over 160 by the end of 2024.
• Another 15 co-branded units were expected to open in 2025.
• There is a pipeline of approximately 50 additional co-branded locations in development.
• A dual-branded Round Table Pizza and Fatburger location in California more than doubled weekly sales and transactions versus its prior standalone format.

Also, the company is actively moving toward an almost 100% franchise model, advancing plans to refranchise the 57 company-operated Fazoli's restaurants, which is projected to yield overhead savings of about $2.5 million per year.

Virtual Dining Concepts (for Great American Cookies delivery via Chuck E. Cheese)

The partnership with Virtual Dining Concepts (VDC) for Great American Cookies is a prime example of leveraging existing infrastructure. This delivery-only brand launched via Chuck E. Cheese locations.

This move is directly tied to FAT Brands Inc. (FAT)'s manufacturing strategy, as the partnership will use the company's manufacturing facility to supply the cookie dough.

Approved architects and kitchen designers for new unit build-out

While specific names or contract values aren't public, the development pipeline of roughly 1,000 signed deals and the goal of over 100 new openings in 2025 necessitates established relationships with design and construction partners to handle the volume.

Recognized distribution networks for cost-effective supply chain

FAT Brands Inc. (FAT) has a recognized partner in Foodbuy, LLC, for procurement and supply chain services, a deal announced back in early 2020, which provides proprietary technology for supply chain visibility and custom contracting. This structure is designed to benefit future acquired brands with a "plug and play" approach.

Strategic partners to expand manufacturing capacity

The manufacturing segment is a direct focus for partnership and expansion. As of the third quarter of 2025, the Georgia-based manufacturing facility was operating at 45% capacity. This facility generated $9.6 million in sales and $3.8 million in adjusted EBITDA, showing a strong 39.6% margin. Management noted that with only a modest capital investment to expand mixing equipment, production capacity can nearly double. This existing capacity and the potential for expansion are critical to supporting the Great American Cookies virtual brand rollout.

Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - Canvas Business Model: Key Activities

You're looking at the core actions FAT Brands Inc. (FAT) is driving right now to manage its complex portfolio and significant financial obligations. It's a mix of growth-focused franchising and intense balance sheet repair.

Strategic acquisition and integration of new restaurant brands

While the immediate focus in late 2025 is deleveraging, the underlying activity involves managing the 18 restaurant brands currently owned by FAT Brands Inc.. A key operational activity supporting the balance sheet strengthening is the planned refranchising of 57 company-operated Fazoli's restaurants. This move aligns with the broader strategy to return to a nearly 100% franchised model.

Franchise development and support for a pipeline of ~900 committed locations

The development pipeline remains a major focus for future earnings, even amid current financial strain. FAT Brands Inc. maintains a robust development pipeline of approximately 900 signed development agreements for new locations, scheduled to open over the next 5 to 7 years. This pipeline is estimated to provide around $50 million to $60 million in incremental adjusted EBITDA.

The execution pace in 2025 shows this activity in action:

• Opened 13 new locations during the third quarter of 2025.
• Opened 60 locations year-to-date as of Q3 2025.
• The target for new openings for the full year 2025 was revised to 80 new units.
• Secured over 190 franchise development agreements year-to-date through Q3 2025.

Brand management and co-branding execution (e.g., Fatburger/Round Table Pizza)

Brand management involves executing strategic pairings to drive incremental sales. The company continues to push co-branding initiatives, which have seen traction across the portfolio. For instance, the first co-branded Round Table Pizza and Marble Slab Creamery pairing launched in the first quarter of 2025. Also, the success of the Fatburger and Buffalo's Express co-branded model is notable, with over 100 locations worldwide. A transformative step in the manufacturing growth strategy involves the partnership with Virtual Dining Concepts to make Great American Cookies available from Chuck E. Cheese locations nationwide.

Manufacturing and supply chain operations (Georgia production facility)

The Georgia-based manufacturing facility, which supplies batter and pretzel mix, is a key resource. While specific 2025 utilization data is limited, prior reporting indicated the facility was operating at 40% to 45% capacity. The cost associated with company-owned restaurants and the dough factory was $94.6 million in the third quarter of 2025. Management is actively pursuing third-party contracts to utilize excess capacity.

Debt restructuring and balance sheet strengthening (a 2025 priority)

This is a critical, ongoing activity, especially following defaults on debt obligations last month. The total debt load stands near $1.3 billion.

Key financial actions driving balance sheet strengthening include:

• Active negotiation of a debt restructuring with noteholders.
• Advancing plans for a $75 million to $100 million equity raise at Twin Hospitality Group Inc. (TWNP), with proceeds intended for debt paydown.
• The common dividend pause remains in effect, preserving $35 to $40 million in annual cash flow. The pause continues until a $25 million principal reduction threshold is met.
• Resolved legal issues are expected to save approximately $30 million annually.
• Over $5 million in annual General and Administrative (G&A) expense reductions have been implemented.

The immediate liquidity position as of the end of Q3 2025 was tight, with only $2 million in available cash and approximately $12 million in restricted cash. Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - Canvas Business Model: Key Resources

Intellectual Property and Network Scale as of Q3 2025:

The centralized management and operational support team is a key resource, though specific team size or cost figures are not provided here.

Manufacturing Asset Performance (Georgia Facility) for Q3 2025:

The manufacturing division, which supports the portfolio, showed the following results for the third quarter ended September 28, 2025:

• Generated $9.6 million in sales.
• Produced $3.8 million in adjusted EBITDA.
• Operating margin on that segment was 39.6%.
• Facility operated at 45% capacity.

Future Growth Resource: Committed Development Pipeline:

The pipeline represents significant future value generation, underpinned by signed agreements:

• Committed locations in the pipeline: Approximately 900.
• Expected incremental EBITDA contribution once fully operational: $50-$60 million.

The company also has a strategic partnership to make Great American Cookies available from over 450 Chuck E Cheese locations, with an additional 500 targeted by year-end.

FAT Brands Inc. (FAT) - Canvas Business Model: Value Propositions

You're looking at the core reasons why franchisees and customers choose FAT Brands Inc. (FAT) over competitors. It's all about what the platform delivers to its partners and patrons, backed by the numbers from the latest reports.

For Franchisees: Asset-light, multi-brand platform for growth

The structure is designed for leverage. FAT Brands Inc. (FAT) operates with an asset light model, meaning the capital burden is largely on the franchisee, which provides significant operating leverage for the franchisor. This structure is built around a broad portfolio, giving operators flexibility and scale. As of the third quarter of 2025, the Company owns 18 distinct restaurant brands.

Growth is fueled by a substantial commitment pipeline. The development pipeline stands at approximately 900 committed locations, which are expected to generate an incremental $50-$60 million in EBITDA once they are fully operational. To further lean into the asset-light strategy, FAT Brands Inc. (FAT) is advancing plans to refranchise 57 company-owned Fazoli's restaurants.

For Franchisees: Co-branding that can double weekly sales and transactions

Co-branding is a proven accelerator here. You see immediate, tangible results when concepts are paired. For instance, the initial dual-branded Round Table Pizza and Fatburger location in California demonstrated the power of this strategy by achieving more than double the weekly sales and transactions compared to its previous standalone Round Table Pizza format.

The pipeline for this high-impact strategy is growing, with approximately 50 additional co-branded locations currently in development. This focus on synergy is also seen in other pairings, such as the launch of three co-branded Marble Slab Creamery and Great American Cookies stores during the second quarter of 2025.

For Customers: Diverse dining options from QSR to polished casual (Twin Peaks)

Customers get variety without having to deal with multiple corporate entities. FAT Brands Inc. (FAT) offers a spectrum of dining experiences, spanning from quick-service (QSR) to casual dining and the polished casual segment, anchored by brands like Twin Peaks. The portfolio includes 18 brands in total.

The performance of the higher-end concepts validates the strategy. For the polished casual segment, specifically Twin Peaks lodges, the Average Unit Volumes (AUVs) for company-operated locations are around $6 million, with top-performing markets hitting between $9 million and $14 million. Overall, the casual dining segment showed operational strength, posting same-store sales growth of 3.9% in the third quarter of 2025.

For Franchisees: Centralized support for real estate, design, and supply chain

Franchisees don't manage a dozen different corporate relationships; they work with one team. This centralized support covers critical operational areas. FAT Brands Inc. (FAT) supports its network of over 760 franchisees by providing a single point of contact for complex needs. This means operators get help with site selection, supply chain logistics, and financial analysis all from one corporate structure.

Here's a quick look at the scale of the franchisee base and the growth they represent:

This single-team approach helps ensure consistency, which is key when a franchisee decides to expand across multiple concepts within the FAT Brands Inc. (FAT) family.

FAT Brands Inc. (FAT) - Canvas Business Model: Customer Relationships

You're looking at how FAT Brands Inc. keeps its franchisees and end-customers engaged, which is key when system-wide sales are under pressure. The relationship strategy here is a mix of hands-on operational help and pushing digital adoption across their 18 restaurant brands.

Dedicated franchise support and ongoing operational training

The core relationship with franchisees centers on development and performance improvement. FAT Brands Inc. is actively managing its physical footprint to enhance customer experience and drive sales, which directly impacts franchisee success. For instance, the company plans to remodel approximately 100 restaurants across its portfolio in the 2025 fiscal year. This commitment to physical refresh is paired with aggressive growth targets, as they opened 13 new locations in the third quarter of 2025 alone. The pipeline for future relationships is strong, with FAT Brands having secured over 190 franchise development agreements during the third quarter of 2025. Overall, the committed location pipeline stands at approximately 900 units, which management expects will contribute $50-$60 million in incremental EBITDA once those units are fully operational.

Real estate guidance is concrete, like the development deal signed in Florida to open 40 additional Fatburger locations over the next decade, which will grow the state presence there to approximately 50 locations. Co-branding is a major focus area for site optimization; the first dual-branded Round Table Pizza and Fatburger location in California more than doubled weekly sales and transactions compared to the prior standalone Round Table Pizza format. To support this, there are approximately 50 additional co-branded locations currently in development.

Here's a quick look at the development and physical improvement metrics:

Digital initiatives and loyalty programs (e.g., 25% digital sales for Great American Cookies)

FAT Brands Inc. is clearly driving customer relationships through digital channels, seeing measurable results in loyalty program adoption and digital revenue mix. The success at Great American Cookies is a prime example of this focus.

The performance metrics for key brands show the impact of these digital pushes:

• At Great American Cookies, digital sales now account for 25% of total revenue.
• Great American Cookies loyalty-driven sales are up 40%.
• Round Table Pizza is seeing 21% loyalty-driven sales growth.
• Round Table Pizza is also experiencing 18% higher customer engagement.

It's worth noting that the casual dining segment, which includes brands like Twin Peaks, posted same-store sales growth of 3.9% in the third quarter of 2025, suggesting that operational execution and perhaps localized marketing efforts are resonating with customers in that segment.

Standardized marketing, PR, and creative support for all brands

The centralized support for marketing and PR is reflected in the advertising spend across the system. For the third quarter of 2025, advertising expenses totaled $12.2 million, an increase from $10.0 million in the same period of 2024. This increased investment suggests a commitment to standardized creative and promotional support across the portfolio, even while the company manages other financial pressures. That's a $2.2 million year-over-year increase in marketing spend for that quarter.

The overall scale of the system dictates the breadth of this support, as FAT Brands Inc. manages over 2,300 units worldwide across its various concepts.

FAT Brands Inc. (FAT) - Canvas Business Model: Channels

You're looking at how FAT Brands Inc. gets its 18 restaurant concepts to the customer base, and it's heavily skewed toward franchising, which keeps their capital needs lower.

The primary channel is through franchised restaurant locations, which is their asset-light distribution method. As of the third quarter of 2025, FAT Brands Inc. operated approximately 2,300 units worldwide, with about 92% of those being franchised. The company has a robust pipeline, backed by approximately 900 committed locations under development from over 190 franchise development agreements secured year-to-date in 2025. The goal for new openings in 2025 was 80 locations, with 60 opened year-to-date as of the Q3 2025 report.

The push toward an asset-light model is clear, as the company is actively pursuing the refranchising of its 57 company-operated Fazoli's restaurants to move toward a 'nearly 100% franchised model.'

Here's a quick look at the channel mix based on recent financial reporting:

Co-branded restaurant units are a key growth focus, validating the opportunity for increased throughput. In the second quarter of 2025, FAT Brands Inc. opened three co-branded Marble Slab Creamery and Great American Cookies stores. The first dual-branded Round Table Pizza and Fatburger location in California showed significant success, more than doubling weekly sales and transactions compared to the standalone Round Table Pizza format. Management sees significant potential here, with a pipeline of approximately 50 additional co-branded locations in development.

The company-owned restaurants channel is shrinking by design, reflecting the strategic shift. Cost of restaurant and factory revenues related to company-owned locations decreased in Q3 2025 to $94.6 million from $96.8 million in the year-ago quarter, partly due to the closure of underperforming Smokey Bones locations and temporary closures for conversion. The plan includes re-franchising 57 Fazoli's company-owned restaurants.

For digital reach, FAT Brands Inc. is using third-party delivery platforms and virtual kitchen partnerships. A notable example is the strategic partnership with Virtual Dining Concepts to make Great American Cookies available from Chuck E. Cheese locations nationwide, which is viewed as a transformative step in their manufacturing growth strategy.

International expansion is a channel for new market penetration. FAT Brands Inc. is actively growing its presence in new territories:

• The company announced a development agreement to open 10 co-branded Great American Cookies and Marble Slab Creamery stores across Iraq over the next five years.
• FAT Brands already operates seven existing locations in Iraq.
• Johnny Rockets expanded internationally in 2025 with new locations in markets including Iraq, Chile, the UAE, Mexico, and Brazil, surpassing 100 locations in these key international markets.

Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - Canvas Business Model: Customer Segments

You're looking at the core groups FAT Brands Inc. (FAT) serves, which is a mix of business operators and the people eating their food. The structure is heavily weighted toward franchising, which defines the primary customer relationship.

Domestic and international multi-unit Franchisees

The franchisees are the engine of FAT Brands Inc. (FAT)'s asset-light model. They are the ones deploying capital to build and operate the physical locations. As of the third quarter ended September 28, 2025, the company franchises and owns approximately 2,300 units worldwide across its portfolio of 18 restaurant brands. The vast majority, about 92% of these locations, are franchised as of that date. The company opened 60 new restaurants so far in 2025, showing continued expansion through this segment. Furthermore, the future commitment from this group is substantial, evidenced by a pipeline of approximately 900 committed locations expected to eventually add $50-$60 million in incremental EBITDA once fully operational.

Here's a snapshot of the scale and growth focus:

End consumers across Quick-Service and Casual Dining segments

The end consumers are the patrons of the diverse portfolio, spanning from quick-service to casual dining experiences. The company saw system-wide sales decline by 5.5% for Q3 2025, with same-store sales (SSS) decreasing by 3.5% across the portfolio in that quarter. Still, specific segments showed strength; the casual dining segment posted same-store sales growth of 3.9% in Q3 2025. Digital engagement is a key driver for some brands, with Great American Cookies reporting digital sales accounting for 25% of total revenue in Q2 2025, and Round Table Pizza showing 21% loyalty-driven sales growth in that same period.

• Casual Dining Segment Q3 2025 Same-Store Sales Growth: 3.9%
• System-Wide Sales Decline Q3 2025: 5.5%
• Great American Cookies Digital Sales Penetration (Q2 2025): 25%

Institutional investors and debt holders (managing the balance sheet defintely matters)

This group is critical given the current financial structure. FAT Brands Inc. (FAT) reported a total long-term debt burden of about $1.2 billion. The debt-to-annualized EBITDA ratio stood at a staggering 23x. The Q3 2025 results showed a total revenue of $140.0 million and a net loss attributable to FAT Brands Inc. of $58.2 million. To manage this, the company secured a bondholder agreement to convert amortizing bonds to interest-only, which is projected to generate an additional $30 to $40 million in annual cash flow savings. The company is also focused on refranchising 57 company-owned Fazoli's locations to move toward an almost 100% franchised model.

Key financial metrics relevant to this segment include:

Co-branding partners seeking to utilize existing kitchen capacity

Co-branding is a specific growth strategy that leverages existing kitchen space, often in underperforming units or new developments, with a complementary brand. The company is actively pursuing this, with a pipeline of approximately 50 additional co-branded locations in development. One dual-branded Round Table Pizza and Fatburger location in California more than doubled weekly sales and transactions compared to its prior standalone Round Table Pizza format, validating the model. Additionally, a strategic partnership with Virtual Dining Concepts makes Great American Cookies available from Chuck E. Cheese locations.

FAT Brands Inc. (FAT) - Canvas Business Model: Cost Structure

You're looking at the expense side of the FAT Brands Inc. ledger, which is heavily influenced by debt service and the cost of running its company-owned restaurant operations. Honestly, when you look at the structure, the financing costs really jump out, especially given the current capital environment. We need to see how these fixed and variable costs stack up against their revenue generation.

Here's a quick look at some of the major cost components from the third quarter of 2025, which closed on September 28, 2025:

The High Interest Expense is definitely a near-term pressure point. For the third quarter of 2025, interest expense specifically was reported at $41.5 million. This is part of the Total Other Expense, net, which hit $41.0 million for the quarter, up from $35.8 million in the year-ago quarter. That high number reflects the leverage taken on to fund the acquisition strategy over the past few years, and it's why management is so focused on debt restructuring right now.

Next up is the Cost of Restaurant and Factory Revenues. This covers the direct costs tied to the operations of company-owned locations and the dough factory. In Q3 2025, this cost came in at $94.6 million. That was actually a slight decrease of $2.2 million, or 2.3%, compared to the $96.8 million in Q3 2024. The reduction was partly due to closing underperforming Smokey Bones locations and temporary closures for Twin Peaks conversions.

You'll see the company is actively working to control overhead through General and Administrative (G&A) expenses. FAT Brands Inc. implemented over $5 million in annual G&A reductions. To be fair, the actual G&A expense for Q3 2025 was $42.7 million, which was high enough to contribute to the net loss, alongside a $6.9 million store closure reserve. They are trying to get leaner while still supporting brand growth.

Advertising expenses are variable, as they tie into advertising revenues. For the third quarter of 2025, advertising spend was $12.2 million. This represented an increase of $2.1 million compared to the $10.0 million spent in the same period last year.

Regarding Acquisition and integration costs for new brands, the current focus has shifted. Management is prioritizing strengthening the balance sheet due to high capital costs, meaning new, large-scale acquisitions are on the back burner for the immediate term. Still, the process of integrating a newly acquired brand takes several months to fully onboard each location onto the FAT Brands platform. The company is monitoring the market for opportunities that fit the right valuation without compromising their deleveraging commitment.

Finance: draft 13-week cash view by Friday.

FAT Brands Inc. (FAT) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers for how FAT Brands Inc. (FAT) brings in its money as of late 2025. It's a mix of recurring franchise income and direct sales, though the latest quarter showed some pressure.

The total top-line number for the fiscal third quarter ended September 28, 2025, was reported at $140.0 million, which was a 2.3% decrease compared to the fiscal third quarter of 2024's total revenue of $143.4 million.

Here's a breakdown of the components that make up that revenue, plus related figures for context, keeping in mind that some line items in the source data are presented in thousands:

Franchise Royalties and Fees (core recurring revenue) are the backbone here, even if the specific royalty percentage isn't detailed. The reported line item for Franchise fees in Q3 2025 was $1,503 thousand. This stream is the asset-light component the management often highlights.

For Manufacturing and Factory Sales, the closest related figure is the cost associated with those operations. Cost of restaurant and factory revenues was $94.6 million for the quarter. This cost decreased by $2.2 million, or 2.3%, year-over-year.

Franchise Fees from new development agreements are supported by the ongoing expansion pipeline. Management noted that they have opened 60 new restaurants so far in 2025. Furthermore, there is a pipeline of approximately 900 committed locations expected to come online. The company also has a pipeline of approximately 50 additional co-branded locations in development.

Advertising Fund Contributions from franchisees are reflected in the related expense. Advertising expenses for Q3 2025 were $12.2 million, up from $10.0 million in the same period last year.

Company-Owned Restaurant Sales are bundled into the overall revenue structure, with the total revenue being $140 million for Q3 2025. The company is also advancing plans for a $75 million to $100 million equity raise at Twin Hospitality Group Inc. to fund new unit development.

• Casual dining segment same-store sales growth was 3.9% in Q3 2025.
• System-wide sales declined 5.5% to $567.5 million in Q3 2025.
• Same-store sales (SSS) decreased by 3.5% across the portfolio.
• The company is preserving $35-$40 million in annual cash flow through a dividend pause.