In 2024, the FAT Brands strategy is going to be all about the three c’s: cobranding, conversion, and cross-utilization. Former CEO and current FAT Brands chairman, Andy Wiederhorn presented at the 2024 ICR conference in Orlando on Monday about how the company is knocking down silos and focusing on synergy between the brands inside the company’s ever-expanding portfolio of companies. Plus, Wiederhorn hinted that the closely watched Twin Peaks IPO could be coming this year.
Cobranding
Although NRN has written about FAT Brands’ cobranding strategy over the past couple of years, that strategy will be ramped up in the coming year, with variations including FAT Burger and Buffalo’s Express, Johnny Rockets with Hurricane Grill & Wings, and FAT Burger with Round Table Pizza.
“Round Table Pizza’s big dining rooms don't get used as much traffic as they used to-- delivery is much higher at Round Table, so we have that dining room capacity ready,” Wiederhorn said. “We have operators that want to add a FAT Burger to their dining room: they have the kitchen already, they can add a FAT Burger to a little bit of underutilized space. Today, out of our 2,300 restaurants, we have about 200 cobranded locations…. You get one facility, two menu boards, one cash register, and menu diversity.”
Conversion
Another strategy FAT Brands has been undertaking is purchasing multiple companies within the same (or similar) categories and converting under-performing or otherwise strategic locations to fuel the company’s overall long-term goals. For example, as Twin Peaks heads into its IPO season, the company will convert 40 or so Smokey Bones locations to Twin Peaks—with the first several converted locations planned to open this year, with more to come in 2025.
“It's a great opportunity for landlords: they get a newly refreshed building and they're going to a big boost in their sales,” Wiederhorn said. “Then, in the markets where Smokey Bones is killing it, we're going to replace those and put new Smokey Bones back in those markets, because there's brand equity.”
FAT Brands has also been busy converting Nestle Toll House Cookies (which it acquired in 2022) into Great American Cookies locations, and thus far it has converted 61 locations, and plans to complete the entire portfolio this year.
Cross-utilization
The third strategy to promote optimal brand strategy is cross-utilization of FAT Brands products, specifically some of the smaller snack brands. When FAT Brands purchased Global Franchise Group in 2021, that purchase came with a factory that makes the cookie dough and pretzel dough used in Great American Cookies and Pretzelmaker stores, which they’re able to expand. Currently, FAT Brands is using that factory to sell cookies across all many of its brands and will look into expanding that capability even further via third-party manufacturing.
IPO Watch
Will Twin Peaks finally take Twin Peaks public in 2024? The timing of the “polished-casual” brand going public still lines up, as NRN previously reported on in October, though that could happen later than Q2, Wiederhorn said Monday.
“There's a lot of demand in the market for new IPOs,” Wiederhorn said. “Twin Peaks is one concept where we kept… everything about the business separate… They’re a pretty big business with more than $500 million in sales and on their way to a billion or more.”
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