Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 31, 2024

FAT Brands Inc.

(Exact name of Registrant as Specified in Its Charter)


Delaware	001-38250		82-1302696
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification No.)

9720 Wilshire Blvd., Suite 500 Beverly Hills, CA (Address of Principal Executive Offices)		90212 (Zip Code)

Registrant’s Telephone Number, Including Area Code: (310) 319-1850

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

FAT

The Nasdaq Stock Market LLC

Class B Common Stock, par value $0.0001 per share

FATBB

The Nasdaq Stock Market LLC

Series B Cumulative Preferred Stock, par value $0.0001 per share

FATBP

The Nasdaq Stock Market LLC

Warrants to purchase Class A Common Stock

FATBW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 31, 2024, FAT Brands Inc. (the “Company”) issued a press release announcing its financial results for the thirteen and twenty-six week periods ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

The Company also hosted a conference call on July 31, 2024 in which the financial results were discussed. A replay is available until Wednesday, August 21, 2024 and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10189773.

The webcast is available at www.fatbrands.com under the “Investors” section.

Item 7.01 Regulation FD Disclosure.

On July 31, 2024, the Company provided supplemental financial information to be used in its earnings presentation for the thirteen and twenty-six week periods ended June 30, 2024 on its website at https://ir.fatbrands.com/events-and-presentations/default.aspx. A copy of the earning supplement is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Securities and Exchange Act of 1934 or the Securities Act of 1933 only if, and to the extent that, such subsequent filing specifically references such information.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit Number						Description
99.1						Press Release Dated July 31, 2024
99.2						Earnings Supplement Q2 - 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			FAT Brands Inc.

Date: July 31, 2024			/s/ Kenneth J. Kuick
			Kenneth J. Kuick
			Co-Chief Executive Officer and Chief Financial Officer

Exhibit 99.1

FAT BRANDS INC. REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS

Conference call and webcast today at 5:00 p.m. ET

LOS ANGELES (July 31, 2024) – FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported financial results for the fiscal second quarter ended June 30, 2024.

“Over the last three years, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with approximately 2,300 units across 40 countries and 49 U.S. states,” said Andy Wiederhorn, Chairman of FAT Brands. “We have opened 45 restaurants year to date, including 24 that opened during the second quarter, and plan to open over 120 new restaurants in 2024. We are seeing strong new franchisee activity as well as continued demand from existing franchise partners to develop other brands within our portfolio and heightened interest from our franchise partners who are eager to explore additional co-branding opportunities that leverage synergies within our brand offerings.”

Ken Kuick, Co-Chief Executive Officer of FAT Brands, commented, “We have signed over 180 development deals year to date, compared to 226 deals for the entirety of 2023, bringing our current pipeline to approximately 1,100 locations.” Kuick continued, “Continuing in 2024 is our focus on the expansion of Twin Peaks. We opened four new lodges during the first half of 2024 and plan to open another 12 to 15 new Twin Peaks lodges in 2024, ending the year with approximately 125 lodges. Additionally, our first conversion of a Smokey Bones location is officially underway. We see this as the first of many sites we will use to fuel Twin Peaks’ fast-paced growth.”

Rob Rosen, Co-Chief Executive Officer of FAT Brands, concluded, “Opportunities in 2024 are abundant. Our long-term strategy is to create value through the organic expansion of our existing brands, acquire additional brands that strategically complement our portfolio, realize value from strategic divestments when appropriate to manage outstanding debt, and ultimately increase long-term value for our stakeholders.”

Fiscal Second Quarter 2024 Highlights

•Total revenue improved 42.4% to $152.0 million compared to $106.8 million in the fiscal second quarter of 2023

◦System-wide sales growth of 8.6% in the fiscal second quarter of 2024 compared to the prior year fiscal quarter

◦Year-to-date system-wide same-store sales declined of 1.6% in the fiscal second quarter of 2024 compared to the prior year

◦24 new store openings during the fiscal second quarter of 2024

•Net loss of $39.4 million, or $2.43 per diluted share, compared to $7.1 million, or $0.53 per diluted share, in the fiscal second quarter of 2023

•EBITDA(1) of $6.8 million compared to $25.6 million in the fiscal second quarter of 2023

•Adjusted EBITDA(1) of $15.7 million compared to $23.1 million in the fiscal second quarter of 2023

•Adjusted net loss(1) of $30.9 million, or $1.93 per diluted share, compared to adjusted net income(1) of $3.0 million, or $0.08 per diluted share, in the fiscal second quarter of 2023

(1)EBITDA, adjusted EBITDA and adjusted net (loss) income are non-GAAP measures defined below, under “Non-GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net (loss) income are included in the accompanying financial tables.

Summary of Fiscal Second Quarter 2024 Financial Results

Total revenue increased $45.2 million, or 42.4%, in the second quarter of 2024 to $152.0 million compared to $106.8 million in the same period of 2023, driven by the acquisition of Smokey Bones in September 2023 and revenues from new restaurant openings.

Costs and expenses consist of general and administrative expense, cost of restaurant and factory revenues, depreciation and amortization, refranchising net loss and advertising fees. Costs and expenses increased $66.4 million, or 75.2%, in the second quarter of 2024 to $154.7 million compared to the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and increased activity from Company-owned restaurants and the Company's factory.

General and administrative expense increased $19.6 million, or 197.2%, in the second quarter of 2024 compared to $9.9 million in the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and the recognition of $12.7 million in Employee Retention Credits during the second quarter of fiscal year 2023, partially offset by the recognition of $2.1 million in Employee Retention Credits during the second quarter of fiscal year 2024.

Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and dough factory and increased $40.6 million, or 68.3%, in the second quarter of 2024, primarily due to the acquisition of Smokey Bones in September 2023 and higher company-owned restaurant sales.

Depreciation and amortization increased $3.2 million, or 45.1% in the second quarter of 2024 compared to the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and depreciation of new property and equipment at company-owned restaurant locations.

Refranchising net loss in the second quarter of 2024 of $0.2 million was comprised of $0.5 million in net loss related to the sale or closure of refranchised restaurants, offset by $0.3 million in restaurant food sales, net of operating costs. Refranchising net loss in the second quarter of 2023 of $0.2 million was comprised of $0.2 million in restaurant operating costs, net of food sales.

Advertising expenses increased $3.0 million in the second quarter of 2024 compared to the prior year period, primarily due to the acquisition of Smokey Bones in September 2023. Additionally, these expenses vary in relation to advertising revenues.

Total other expense, net, for the second quarter of 2024 and 2023 was $34.8 million and $24.2 million, respectively, which is inclusive of interest expense of $34.0 million and $24.3 million, respectively. This increase is primarily due to new debt issuances.

Adjusted net loss(1) of $30.9 million, or $1.93 per diluted share, compared to adjusted net income(1) of $3.0 million, or $0.08 per diluted share, in the fiscal second quarter of 2023.

Key Financial Definitions

New store openings - The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of stores openings has, and will continue to have, an impact on our results.

Same-store sales growth - Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year.

System-wide sales growth - System wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of

acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period.

Conference Call and Webcast

FAT Brands will host a conference call and webcast to discuss its fiscal second quarter 2024 financial results today at 5:00 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.

The conference call can be accessed live over the phone by dialing 1-844-826-3035 from the U.S. or 1-412-317-5195 internationally. A replay will be available after the call until Wednesday, August 21, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10189773. The webcast will be available at www.fatbrands.com under the “Investors” section and will be archived on the site shortly after the call has concluded.

About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, the timing and performance of new store openings, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Non-GAAP Measures (Unaudited)

This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net (loss) income.

EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP.

Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising loss, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations.

Adjusted net (loss) income is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net (loss) income is defined as net (loss) income plus the impact of adjustments and the tax effects of such adjustments. Adjusted net (loss) income is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net (loss) income as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results.

Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below.

Investor Relations:

ICR

Michelle Michalski

ir-fatbrands@icrinc.com

646-277-1224

Media Relations:

Erin Mandzik

emandzik@fatbrands.com

860-212-6509

FAT Brands Inc. Consolidated Statements of Operations


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In thousands, except share and per share data)	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023

Revenue
Royalties	$	23,318	$	22,751	$	45,265	$	45,236
Restaurant sales	107,410		62,778		213,348		125,379
Advertising fees	10,065		9,668		19,861		19,019
Factory revenues	9,636		9,686		19,110		18,851
Franchise fees	1,113		763		2,594		1,565
Other revenue	498		1,118		3,829		2,405
Total revenue	152,040		106,764		304,007		212,455

Costs and expenses
General and administrative expense	29,558		9,947		59,563		38,362
Cost of restaurant and factory revenues	100,113		59,502		199,163		118,589
Depreciation and amortization	10,246		7,061		20,440		14,177
Refranchising loss	175		179		1,683		338

Advertising fees	14,651		11,610		27,243		22,137
Total costs and expenses	154,743		88,299		308,092		193,603

(Loss) income from operations	(2,703)		18,465		(4,085)		18,852

Other (expense) income, net
Interest expense	(29,586)		(20,008)		(59,209)		(45,098)
Interest expense related to preferred shares	(4,417)		(4,311)		(8,835)		(9,354)
Net gain on extinguishment of debt	—		—		427		—
Other (expense) income, net	(752)		109		(548)		265
Total other expense, net	(34,755)		(24,210)		(68,165)		(54,187)

Loss before income tax provision	(37,458)		(5,745)		(72,250)		(35,335)

Income tax provision	(1,901)		(1,346)		(5,425)		(3,882)

Net loss	$	(39,359)	$	(7,091)	$	(77,675)	$	(39,217)

Net loss	$	(39,359)	$	(7,091)	$	(77,675)	$	(39,217)
Dividends on preferred shares	(1,920)		(1,615)		(3,801)		(3,381)
	$	(41,279)	$	(8,706)	$	(81,476)	$	(42,598)

Basic and diluted loss per common share	$	(2.43)	$	(0.53)	$	(4.80)	$	(2.58)
Basic and diluted weighted average shares outstanding	17,007,352		16,522,379		16,977,376		16,521,590
Cash dividends declared per common share	$	0.14	$	0.14	$	0.28	$	0.28

FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In thousands)	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023

Net loss	$	(39,359)	$	(7,091)	$	(77,675)	$	(39,217)
Interest expense, net	34,003		24,319		68,044		54,452
Income tax provision	1,901		1,346		5,425		3,882
Depreciation and amortization	10,246		7,061		20,440		14,177
EBITDA	6,791		25,635		16,234		33,294
Bad debt expense	(1,729)		(13,106)		(1,561)		(12,071)
Share-based compensation expenses	677		477		1,422		1,572
Non-cash lease expenses	758		293		1,388		674

Refranchising loss	175		179		1,683		338
Litigation costs	7,852		6,924		11,660		14,668
Severance	19		1,036		41		1,036
Net loss related to advertising fund deficit	1,140		1,688		3,422		2,773
Net gain on extinguishment of debt	—		—		(427)		—
Pre-opening expenses	63		11		91		40
Adjusted EBITDA	$	15,747	$	23,137	$	33,953	$	42,325

FAT Brands Inc. Adjusted Net (Loss) Income Reconciliation


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In thousands, except share and per share data)	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023

Net loss	$	(39,359)	$	(7,091)	$	(77,675)	$	(39,217)
Refranchising loss	175		179		1,683		338

Net gain on extinguishment of debt	—		—		(427)		—
Litigation costs	7,852		6,924		11,660		14,668
Severance	19		1,036		41		1,036
Tax adjustments, net (1)	408		1,907		973		1,762
Adjusted net (loss) income	$	(30,904)	$	2,955	$	(63,745)	$	(21,413)

Net loss	$	(39,359)	$	(7,091)	$	(77,675)	$	(39,217)
Dividends on preferred shares	(1,920)		(1,615)		(3,801)		(3,381)
	$	(41,279)	$	(8,706)	$	(81,476)	$	(42,598)

Adjusted net (loss) income	$	(30,904)	$	2,955	$	(63,745)	$	(21,413)
Dividends on preferred shares	(1,920)		(1,615)		(3,801)		(3,381)
	$	(32,824)	$	1,340	$	(67,546)	$	(24,794)

Loss per basic and diluted share	$	(2.43)	$	(0.53)	$	(4.80)	$	(2.58)
Adjusted net (loss) income per basic and diluted share	$	(1.93)	$	0.08	$	(3.98)	$	(1.50)

Weighted average basic and diluted shares outstanding	17,007,352		16,522,379		16,977,376		16,521,590

(1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

Q2 2024 EARNINGS SUPPLEMENT JULY 31, 2024

LEGAL DISCLAIMER This earnings supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this earnings supplement. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this earnings supplement. 2

Q2 2024 HIGHLIGHTS 3 8.6% Sales Growth (1) System-Wide -1.6% SSS Decline (2) System-Wide 24 New Store Openings (3) Q2 2024 $152.0mm Total Revenue Q2 2024 $15.7mm Adj. EBITDA (4) Q2 2024 $614.7mm System-Wide Sales (1) System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. (2) Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. (3) New store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. (4) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

Q2 2024 RESULTS 4 (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. 2Q 2023 includes $12.7 million related to Employee Retention Tax Credits and 2Q 2024 includes $2.1 million related to Employee Retention Tax Credits. Royalties $22.8mm $23.3mm Q2 2023 Q2 2024 Systemwide Sales Revenue $106.8mm $152.0mm Q2 2023 Q2 2024 Adj. EBITDA (1) $23.1mm $15.7mm Q2 2023 Q2 2024 $572.7mm $614.7mm Q2 2023 Q2 2024

2024 STRATEGIC FOCUS 5 Accelerate Build-Out of 1,100+ Unit New Store Pipeline Drive Adj. EBITDA Growth ~$10mm from New Stores ~$5mm from Factory Maintain Strong Liquidity Continue to Build Net Asset Value for Future Liquidity (Debt Reduction) Event Grow Factory Production to Utilize ~60% Excess Capacity via Expanded Organic Channels & 3rd Party Dough & Mix Manufacturing Realize Purchasing Savings from ~$600mm in Purchasing Power Effectively Reducing Costs

APPENDIX

DEFINITIONS “EBITDA,” a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted EBITDA,” a non-GAAP measure, defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted net loss,” a non-GAAP measure, defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non- GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results. Reconciliations of net loss attributable to FAT Brands Inc. presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the Appendix. “Same-store sales growth” or “SSS” a non-GAAP measure, reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. “System-wide sales growth,” a non-GAAP measure, reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. I

CONSOLIDATED STATEMENT OF OPERATIONS II FAT Brands Inc. Consolidated Statements of Operations Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands, except share and per share data) June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Revenue Royalties $ 23,318 $ 22,751 $ 45,265 $ 45,236 Restaurant sales 107,410 62,778 213,348 125,379 Advertising fees 10,065 9,668 19,861 19,019 Factory revenues 9,636 9,686 19,110 18,851 Franchise fees 1,113 763 2,594 1,565 Other revenue 498 1,118 3,829 2,405 Total revenue 152,040 106,764 304,007 212,455 Costs and expenses General and administrative expense 29,558 9,947 59,563 38,362 Cost of restaurant and factory revenues 100,113 59,502 199,163 118,589 Depreciation and amortization 10,246 7,061 20,440 14,177 Refranchising loss 175 179 1,683 338 Advertising fees 14,651 11,610 27,243 22,137 Total costs and expenses 154,743 88,299 308,092 193,603 (Loss) income from operations (2,703) 18,465 (4,085) 18,852 Other (expense) income, net Interest expense (29,586) (20,008) (59,209) (45,098) Interest expense related to preferred shares (4,417) (4,311) (8,835) (9,354) Net gain on extinguishment of debt — — 427 — Other (expense) income, net (752) 109 (548) 265 Total other expense, net (34,755) (24,210) (68,165) (54,187) Loss before income tax provision (37,458) (5,745) (72,250) (35,335) Income tax provision (1,901) (1,346) (5,425) (3,882) Net loss $ (39,359) $ (7,091) $ (77,675) $ (39,217) Net loss $ (39,359) $ (7,091) $ (77,675) $ (39,217) Dividends on preferred shares (1,920) (1,615) (3,801) (3,381) $ (41,279) $ (8,706) $ (81,476) $ (42,598) Basic and diluted loss per common share $ (2.43) $ (0.53) $ (4.80) $ (2.58) Basic and diluted weighted average shares outstanding 17,007,352 16,522,379 16,977,376 16,521,590 Cash dividends declared per common share $ 0.14 $ 0.14 $ 0.28 $ 0.28

CONSOLIDATED EBITDA & ADJ. EBITDA RECONCILIATION IV FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Net loss $ (39,359) $ (7,091) $ (77,675) $ (39,217) Interest expense, net 34,003 24,319 68,044 54,452 Income tax provision 1,901 1,346 5,425 3,882 Depreciation and amortization 10,246 7,061 20,440 14,177 EBITDA 6,791 25,635 16,234 33,294 Bad debt expense (1,729) (13,106) (1,561) (12,071) Share-based compensation expenses 677 477 1,422 1,572 Non-cash lease expenses 758 293 1,388 674 Refranchising loss 175 179 1,683 338 Litigation costs 7,852 6,924 11,660 14,668 Severance 19 1,036 41 1,036 Net loss related to advertising fund deficit 1,140 1,688 3,422 2,773 Net gain on extinguishment of debt — — (427) — Pre-opening expenses 63 11 91 40 Adjusted EBITDA $ 15,747 $ 23,137 $ 33,953 $ 42,325

ADJUSTED NET LOSS RECONCILIATION V FAT Brands Inc. Adjusted Net (Loss) Income Reconciliation Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands, except share and per share data) June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Net loss $ (39,359) $ (7,091) $ (77,675) $ (39,217) Refranchising loss 175 179 1,683 338 Net gain on extinguishment of debt — — (427) — Litigation costs 7,852 6,924 11,660 14,668 Severance 19 1,036 41 1,036 Tax adjustments, net (1) 408 1,907 973 1,762 Adjusted net (loss) income $ (30,904) $ 2,955 $ (63,745) $ (21,413) Net loss $ (39,359) $ (7,091) $ (77,675) $ (39,217) Dividends on preferred shares (1,920) (1,615) (3,801) (3,381) $ (41,279) $ (8,706) $ (81,476) $ (42,598) Adjusted net (loss) income $ (30,904) $ 2,955 $ (63,745) $ (21,413) Dividends on preferred shares (1,920) (1,615) (3,801) (3,381) $ (32,824) $ 1,340 $ (67,546) $ (24,794) Loss per basic and diluted share $ (2.43) $ (0.53) $ (4.80) $ (2.58) Adjusted net (loss) income per basic and diluted share $ (1.93) $ 0.08 $ (3.98) $ (1.50) Weighted average basic and diluted shares outstanding 17,007,352 16,522,379 16,977,376 16,521,590 (1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

CONTACT INVESTOR RELATIONS: MEDIA RELATIONS: ICR MICHELLE MICHALSKI IR-FATBRANDS@ICRINC.COM 646-277-1224 FAT BRANDS ERIN MANDZIK EMANDZIK@FATBRANDS.COM 860-212-6509

Cover	Jul. 31, 2024
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Jul. 31, 2024
Entity Registrant Name	FAT Brands Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38250
Entity Tax Identification Number	82-1302696
Entity Address, Address Line One	9720 Wilshire Blvd.
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Beverly Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90212
City Area Code	310
Local Phone Number	319-1850
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001705012
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	FAT
Security Exchange Name	NASDAQ
Class B Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock, par value $0.0001 per share
Trading Symbol	FATBB
Security Exchange Name	NASDAQ
Series B Cumulative Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series B Cumulative Preferred Stock, par value $0.0001 per share
Trading Symbol	FATBP
Security Exchange Name	NASDAQ
Warrants to Purchase Common Stock
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase Class A Common Stock
Trading Symbol	FATBW
Security Exchange Name	NASDAQ