Restaurant franchiser FAT Brands, which owns chains including Fatburger, Johnny Rockets, and Twin Peaks, recently filed for Chapter 11 bankruptcy as it works to restructure roughly $1.3 billion in debt.
The California-based company, which oversees 18 restaurant concepts with more than 2,200 locations worldwide, filed for protection in Texas on January 26.
Its subsidiary, Twin Hospitality Group Inc., which operates the Twin Peaks sports bar chain, also filed for Chapter 11 bankruptcy. The restaurant franchisor spun off from FAT Brands in 2025 and currently operates 114 Twin Peaks locations across the U.S. and Mexico.
Aggressive acquisition strategy backfires
The filing comes just months after FAT Brands announced plans to expand Fatburger, including a push to open at least 40 new locations in Florida over the next several years. The company pointed to industry-wide pressures, such as inflation, rising costs, and softer demand for casual dining, as key factors behind the restructuring.
The bankruptcy proceedings will be used to reduce leverage, preserve value for stakeholders, and continue operating the restaurant brands. The market, however, reacted negatively to the news. Shares of FAT Brands fell sharply following the announcement, dropping about 45% shortly after the filing became public.
Cash crunch nearly derailed payroll
According to court filings cited by Reuters, FAT Brands missed debt payments sometime before mid-November and reported having about $2.1 million in cash on hand at the time of the bankruptcy filing. The company used part of its remaining funds to cover roughly $400,000 in employee paychecks to prevent them from bouncing.
The franchising operator said its core restaurant operations are expected to continue as normal during the restructuring process. The company owns a wide range of restaurant chains, including Round Table Pizza, Marble Slab Creamery, Fazoli’s, Twin Peaks, Great American Cookies, Smokey Bones, Hot Dog on a Stick, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, and Ponderosa and Bonanza Steakhouses.
The bankruptcy follows legal scrutiny involving the company’s CEO, Andrew Wiederhorn.
In 2024, the U.S. Department of Justice charged Wiederhorn with defrauding investors through shareholder loans. The case was dismissed in 2025 after the federal prosecutor handling it was removed.
Sources: FAT Brands, SEC Filing, Global News Wire, Fox Business