FAT Brands Inc. Files for Chapter 11 Bankruptcy

FAT Brands Inc., the parent company of well‑known quick‑service and casual‑dining chains such as Fatburger, Johnny Rockets, Twin Peaks, and Round Table Pizza, announced on 27 January 2026 that it had filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas.

Debt Load and Financial Position

  • The filing disclosed $1.45 billion in funded debt, a figure that exceeds the company’s current liquidity and renders its debt load unsustainable.
  • The company’s market capitalization was $7.27 million as of the close on 27 January 2026, reflecting the market’s reaction to the bankruptcy announcement.
  • FAT Brands’ price‑to‑earnings ratio was –0.03, indicating a lack of profitability under the current debt burden.

Immediate Operational Impact

  • The bankruptcy petition includes a request to reject leases for several restaurant locations, including those operating under the Fatburger and Johnny Rockets brands.
  • A list of closures was released by Fast Company on 28 January 2026, naming several locations as “doomed” following the bankruptcy filing.
  • The company’s official statement noted that the restructuring process would involve evaluating the viability of individual franchise sites and potentially closing or selling underperforming assets.

Corporate Governance Changes

  • On 26 January 2026, FAT Brands announced board and executive appointments. The new leadership team was tasked with overseeing the bankruptcy proceedings and guiding the company toward a viable post‑bankruptcy structure.
  • The board changes were reported by Marketscreener on 27 January 2026.
  • FAT Brands filed a voluntary Chapter 11 petition on 27 January 2026 to restructure its debt and bolster its capital structure. The petition was filed in a Texas federal court, consistent with the company’s primary operations in the United States.
  • The filing cited the need to reduce the debt load and address liquidity concerns as the primary motivation for entering bankruptcy.
  • The company’s filings were reported by multiple financial news outlets, including Yahoo Finance, WSJ, Investing.com, RTT News, and Taiwan News.

Market Reaction

  • The company’s stock, traded on Nasdaq, fell sharply from a 52‑week high of $4.099 (on 2 February 2025) to a low of $0.176 (on 26 January 2026). The close on 27 January 2026 was $0.254.
  • The stock’s poor performance reflects investor concern over the company’s debt burden and the uncertainty surrounding the outcome of the bankruptcy proceedings.

Future Outlook

  • The bankruptcy process will require the company to negotiate with creditors, evaluate franchise performance, and potentially divest assets or close locations.
  • The outcome will determine whether FAT Brands can continue to operate its well‑known restaurant brands or if a sale or liquidation of the parent company is necessary.
  • Stakeholders—including franchisees, suppliers, and employees—will closely monitor the court filings and trustee decisions as the proceedings unfold.