LOS ANGELES - FAT Brands Inc., the parent company of Fatburger and Round Table Pizza, has announced a development deal to introduce 40 new franchised Fatburger outlets within existing Round Table Pizza locations across Northern California. The expansion, set to occur over the next decade, marks a significant growth strategy for the company, leveraging the popularity of both brands in their home state.
The first of these co-branded locations is scheduled to open within the year, following the success of a similar concept in the Dallas area. This partnership with California Burger, Inc., which also operates Circle Pizza LLC, aims to capitalize on the combined appeal of Fatburger's signature burgers and Round Table Pizza's well-known pizzas.
Taylor Wiederhorn, Chief Development Officer of FAT Brands, noted the enthusiasm from franchisees for the dual-brand format, expressing confidence in the growth potential of the co-branded model. The company has previously seen success with Fatburger and Buffalo’s Express locations, which now exceed 100 worldwide.
Fatburger, known for its customizable, cooked-to-order burgers, has cultivated a loyal following since its inception over 70 years ago in Los Angeles. The menu also includes fries, turkeyburgers, chicken sandwiches, and milkshakes. Round Table Pizza, with a history spanning over 60 years, prides itself on handmade dough and high-quality ingredients.
FAT Brands, listed on NASDAQ under the ticker NASDAQ:FAT, manages a portfolio of 18 restaurant brands and operates over 2,300 units globally. The company's strategy involves the acquisition and development of restaurant concepts, with a focus on fast casual and casual dining.
The information for this expansion is based on a press release statement from FAT Brands Inc. The forward-looking statements included in the press release involve risks and uncertainties, and actual results may differ materially from those projected. The company regularly files reports with the Securities and Exchange Commission, which provide further details about its business and expansion plans.
InvestingPro Insights
As FAT Brands Inc. embarks on its ambitious expansion plan in Northern California, the company's financial health and market performance are of particular interest to investors and stakeholders. According to the latest data from InvestingPro, FAT Brands has a market capitalization of $117.87 million, indicating its size and presence within the industry. Despite a challenging P/E ratio of -1.09, reflecting concerns about profitability, the company has demonstrated an impressive revenue growth of 17.98% over the last twelve months as of Q4 2023.
Investors may find comfort in the company's ability to maintain a robust dividend yield of 7.54%, a testament to its commitment to returning value to shareholders. This aligns with one of the InvestingPro Tips, which highlights that FAT Brands has raised its dividend for three consecutive years. Additionally, the company has experienced a strong 20.93% price total return over the last three months as of early 2024, suggesting a positive response from the market to its growth strategies and operational performance.
While FAT Brands operates with a significant debt burden, as noted in another InvestingPro Tip, the company's expansion efforts and dual-brand strategy could potentially offset some of these financial pressures by driving further revenue growth. For investors looking for more detailed analysis and additional InvestingPro Tips, visiting the dedicated page for FAT Brands at InvestingPro can provide a more comprehensive understanding of the company's financial outlook. There are currently 13 additional InvestingPro Tips available, offering deeper insights into the company's performance and projections. To access these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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