As FAT Brands (FAT) looks ahead to their “all brands on deck” franchisee convention next week, eighteen months after their successful inaugural event in August of ’22, management is also focused on building sales across the portfolio, building out their 1,000 store development pipeline and signing new deals as well.  In calendar ’24, the headlines have been as follows:

January 8^th – Round Table Pizza Announces Debut in Oklahoma and Arkansas

January 8^th -Smokey Bones Turns Back the Clock to 1999 – rolling back prices to the founding date

January 9^th -Round Table Pizza Unveils Feast of Flavors with Two New Menu Additions

January 10^th – Fazoli’s Entices Fans in 2024 with All-New Stuffed Shell Entrees’

January 12^th – West Coast Debut of Co-Branded Johnny Rockets and Hurricane Wings

January 23^rd – FAT Brands Sends off 2023 with Another Year of Strong Organic Growth

January 29^th – Round Table Pizza Shares Love on National Pizza Day and Valentine’s Day with Sweet Deals

February 8^th – Smokey Bones Unleashes New Bones Club Loyalty Program

February 20^th – Marble Slab Creamery – 40 Unit Development Deal in Canada

February 22^nd – Hollywood Favorite, Fatburger, Arrives in Orlando

February 27^th– Smoke Bones Donates over $100,000 to Robert Irvine Foundation

March 6^th – Round Table Pizza Does the Math this Pi Day! $3.14 Personal Pizza for Reward Members

March 6^th – Johnny Rockets Adds Brand-New Cookie Jar Shake to Iconic Hand-Spun Shake Menu

March 18^th– Smokey Bones Turns Up Basketball Season with All You Can Eat Wings

March 25^th – Excalibur’s Epic Pizza Debuts at Round Table Pizza

March 27^th -Prezelmaker Debuts Cinnamon Toast Crunch Cinnadust Pretzel Bites

April 3^rd – Fazoli’s Kicks Off Int’l Growth with 25 Unit Canadian Development Deal

January 8^th – Great American Cookies Serves Free Cookie Cake Slices for Tax Day 2024

January 8^th – Native Grill & WINGS Rakes in Two Local Awards

January 8^th – Smokey Bones and Red Bull Ignite Miami Race Weekend with BBQ Pit Stop

January 8^th – Hot Dog on a Stick Heads to the Tropics with All-New Dragon Fruit Lemonade

REGARDING TWIN PEAKS

The Company continues to move forward toward an IPO of a portion of their ownership of Twin Peaks, the current likelihood being a Q3’24 event. General market conditions will, of course, be a factor.

FURTHER COMMENTARY REGARDING THE FAT (multi) Brands’ CONVENTION

We attended the first event in August ’22, and reported on the obvious positive spirit, no doubt a result of the very evident “hands on” personal approach by the management of FAT Brands. While a cynic might have questioned the wisdom of bringing all the “inmates” together to compare notes, and the potential danger of one unhappy apple spoiling the barrel, FAT management seem to have no fear of that, and it turned out with good reason.  Furthermore, while I attended many franchise conventions back in the day, today we know of no other publicly held franchising company that has invited independent analysts and/or money managers. While we don’t personally speak with management of Wingstop, Domino’s or Dine Brands (for example) we would certainly appreciate access to some of the franchisees before making a judgment on the stock. For those analysts that are reading this piece, I’m sure management would welcome you next week, so let me (or them) know of your interest. (I can’t help but recall attending several IHOP franchise conventions back in the 1990’s, though the First Boston underwriter’s analyst didn’t make it for several years. The insight gained helped my clients and myself make a fortune in IHOP stock. That was when CEO, Kim Herzer, just wanted to do pancakes, and make sure that every franchisee was successful, long before his successor borrowed over a billion dollars to buy Applebee’s. I’m still friendly with their CFO at the time, Fred Silny, and  I ski almost every year with their then VP of Marketing, Steve Pettise. In those days, management did not use their IR firms to buffer them from analysts and  “curate” the information provided to Wall Street. It’s my website, so I can philosophize if I want to 🙂 )

War stories aside, we will happily go to Las Vegas next week to learn what we can. We expect that one of the tangible results for FAT Brands will be some new development deals, as at the last gathering.  In any event, aside from taking the temperature of the FAT Brands portfolio, we expect to get an “on the ground” update regarding the state of the consumer. Considering that the restaurant industry remains a leading indicator for the general economy, some of those PHD economists at the Fed could learn something as well.

Roger Lipton