LOS ANGELES–(BUSINESS WIRE)–FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) announced today that it has completed the acquisition of Johnny Rockets from an affiliate of private equity firm Sun Capital Partners, Inc. for a purchase price of approximately $25 million. The transaction was funded with proceeds from an increase in the Company’s securitization facility. With the acquisition of Johnny Rockets, FAT Brands now franchises more than 700 restaurants around the globe in more than 30 countries with annual system-wide sales exceeding $700 million.
“We are thrilled to successfully complete the acquisition of Johnny Rockets, a transformative event for FAT Brands, and are eager to drive further growth for the brand,” said Andy Wiederhorn, President and CEO of FAT Brands. “The expansion of our whole business securitization facility further enhances our liquidity and financial flexibility and demonstrates the confidence that institutional investors have in our platform. We continue to scale our business through strategic acquisitions that complement our current brands and are pursuing other attractive opportunities in this environment.”
$40 Million Increase in Whole Business Securitization Facility
On September 21, 2020, the Company completed the sale of $40 million of Series 2020-2 Fixed Rate Asset-Backed Notes (the “Notes”), increasing the Company’s securitization facility to $80 million. The Notes were issued through the Company’s whole business securitization affiliate, FAT Brands Royalty I, LLC.
Cadence Group, Inc., a leading fintech securitization platform, acted as the sole structuring agent for the offering of Notes. Legal advisors for the financing transaction were Loeb & Loeb LLP and Foley & Lardner LLP for FAT Brands, and Manatt, Phelps & Phillips, LLP for Cadence Group, Inc.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security. The Notes have not been, and will not be, registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933.
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets and develops fast casual and casual dining restaurant concepts around the world. The Company currently owns nine restaurant brands: Fatburger, Johnny Rockets, Buffalo’s Cafe, Buffalo’s Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises over 700 units worldwide. For more information, please visit www.fatbrands.com.
About Johnny Rockets
Founded in 1986 on iconic Melrose Avenue in Los Angeles, Johnny Rockets is a world-renowned, international restaurant franchise that offers high quality, innovative menu items including items including Certified Angus Beef® cooked-to-order hamburgers, Boca Burger®, chicken sandwiches, crispy fries and rich, delicious hand-spun shakes and malts. With nearly 325 franchise and corporate locations in over 25 countries around the globe, this dynamic lifestyle brand offers friendly service and upbeat music contributing to the chain’s signature atmosphere of relaxed, casual fun. To learn more about the Johnny Rockets brand, please visit the brand website at www.johnnyrockets.com, or follow us on Facebook, Twitter and Instagram.
About Sun Capital Partners, Inc.
In 2020, Sun Capital Partners, Inc. celebrates 25 years of investing; identifying companies’ untapped potential, and accelerating value through operational excellence. Since 1995, Sun Capital has invested in more than 375 companies worldwide with revenues in excess of $50 billion across a broad range of industries and transaction structures. Over the quarter century, the Firm has built a reputation as a trusted partner recognized for its investment and operational experience, including particular expertise in Business and Consumer Services, Healthcare, Industrial and Consumer sectors. Sun Capital has offices in Boca Raton, Los Angeles and New York, and an affiliate with offices in London. To learn more about Sun Capital Partners, Inc., please visit our website at www.suncappart.com.
The company blamed coronavirus for the filing and said it needs to renegotiate leases and cut back on debt
By Jonathan Maze on Sep. 21, 2020
Sizzler USA declared bankruptcy on Monday, blaming the coronavirus for hurting sales at the 62-year-old chain and saying it needed to take the step to renegotiate its leases and cut back on its debt.
The Mission Viejo, Calif.-based chain, which operates 107 locations, said it has between $1 million and $10 million in liabilities and the same amount of assets. The company said it expects to emerge from the Chapter 11 bankruptcy process within 120 days.
“The filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement,” Sizzler USA said in a statement. The company said the filing would allow the company “to do everything we can to support our employees and franchisees” and also “build a stronger future.”
Sizzler USA has been in decline in recent years. Its unit count declined 6.9% last year, according to data from Restaurant Business sister company Technomic, and the number of locations it operates now is 15 fewer than it operated at the end of 2019.
System sales have averaged a 2.5% decline the past five years, including a 3.8% decline in 2019, according to Technomic. Franchisees operate all but 14 of the company’s locations.
Sizzler says that it needs to renegotiate leases with the landlords for the 14 company-operated restaurants.
“Today’s filing represents a new chapter for Sizzler and it’s an option we’ve undertaken based on the underlying strength of our 62-year-old legacy brand,” Chris Perkins, president of Sizzler USA, said in a statement. “Many restaurant brands across the country have suffered because of COVID-19, and Sizzler USA is no exception.”