Multiple entities have been declared winners in an auction for different chains operated by the bankrupt Fat Brands, largely guaranteeing that the restaurant chain operator is broken up, even if it’s not entirely clear who all the buyers are.
Winning bidders have been selected for Twin Peaks, Hot Dog on a Stick and Elevation Burger, according to court documents in the Fat Brands bankruptcy this week. Twelve of the 13 remaining restaurant chains under the company’s umbrella are being sold together to a single buyer, led by Round Table Pizza, Fazoli’s and Johnny Rockets.
One brand, however, will not survive the bankruptcy process. Smokey Bones, the barbecue chain that Fat Brands bought in 2023 as a way to grow Twin Peaks, appears to have closed all of its locations, based on local reports and the company’s website, where all the locations are listed as closed daily.
The sale process must still get through multiple hearings before it is finalized and the official buyers are known.
Amazing Brands LLC, a Nevada company, was listed as the winner bidder for Hot Dog on a Stick at $8 million. Insight Capital, which has a lien on the hot dog brand, said that the sale price wasn’t nearly enough to cover the $20.5 million it is owed and has objected to the sale.
Tabco International Food Catering, a company based in Kuwait, has apparently won the bidding for Elevation Burger, one of the smallest concepts in the Fat Brands roster. The bid was for $2.5 million.
The other two entities remain a mystery. Twin Peaks, the biggest and most valuable of the 16 chains Fat Brands owned going into the bankruptcy filing, is likely to be sold to a Delaware-based entity known only as TWNPKS Bid Co. Yet the credit bid suggests that one of the company’s bondholders is behind that bid.
The remaining Fat Brands concepts all appear to be headed for another buyer with a credit bid, known as FBG Bid Co. Numerous sources did not respond to requests for comment on Wednesday.
In a credit bid, secured lenders agree to convert the money they’re owed to equity. It can give them a distinct advantage in a bankruptcy auction, because they can bid the amount they’re owed, which can often be more than the company’s perceived worth.
Credit conversions have become more common in recent years in bankruptcy auctions, largely because the value of restaurant operating companies has fallen coming out of the pandemic.
As for Smokey Bones, Fat Brands acquired the barbecue chain for $30 million, the company’s last big acquisition. At the time, the chain operated 61 locations and was owned by the private-equity group Sun Capital.
Andy Wiederhorn, the founder and former CEO of Fat Brands, immediately suggested the brand would be used to convert into Twin Peaks, citing the sports bar chain’s higher unit volumes.
The chain, which operated those same 61 restaurants for years, closed six in 2024 and another 10 last year, getting down to 45, according to Technomic Ignite data. It has spent much of this year closing more locations amid the bankruptcy process and local reports across the country have indicated the chain has shut down the remainder of its restaurants.
Fat Brands was created in 2017 when Wiederhorn, the owner of Fatburger, acquired the Ponderosa and Bonanza chains and went public through a mini-IPO.
The company amassed small restaurant chains at low prices for years before using a series of securitized debt financing strategies to acquire much larger brands, including Johnny Rockets, Fazoli’s, Global Franchise Group and Twin Peaks. The acquisitions left the company with a heavy debt load and it filed for bankruptcy with some $1.5 billion in secured liabilities.
Wiederhorn, whose controversial ownership of Fat Brands was a sticking point with bondholders, left the company earlier this year in a deal to secure bankruptcy financing. Wiederhorn, however, was still allowed to bid on the company he founded.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.