Restaurant giant files for bankruptcy under massive debt shortly after touting major expansion

Restaurant franchiser FAT Brands, which owns popular fast-casual chains including Fatburger, Johnny Rockets and Twin Peaks, has filed for bankruptcy amid a mounting debt of roughly $1.3 billion.

The California-based company, which oversees 18 restaurant brands with more than 2,200 locations worldwide, filed for Chapter 11 bankruptcy in Texas on Monday.

Its subsidiary, Texas-based Twin Hospitality Group, which spun off from FAT Brands in 2025 primarily to operate the Twin Peaks sports bar chain, also filed for Chapter 11 bankruptcy. As of 2026, the company operates 114 locations across the U.S. and Mexico. 

The filing came just months after the company announced plans to expand its fast-food chain Fatburger, aiming to add at least 40 new locations in just Florida alone over the next few years.

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FAT Brands confirmed to FOX Business on Tuesday that its company was hit by common headwinds in the restaurant industry, including inflation and declining customer demand for casual dining. 

“Market conditions over the past few years have been difficult and largely unforeseen,” Erin Mandzik, a communications senior director, said. “While our brands remain strong, these market conditions have created challenges in restructuring the debt we took on to acquire and strategically grow the FAT Brands portfolio. We have undertaken the Chapter 11 process to assist in restructuring that debt.”

“FAT Brands plans to use the filings to deleverage the balance sheet, maximize value for its stakeholders, and support continued growth of its brands,” the company added.

Shares of FAT Brands plummeted 45% immediately following the announcement.

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The company currently owns 18 restaurant brands including Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Smokey Bones, 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

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FAT Brands reportedly missed payments sometime before mid-November of last year, and Reuters noted that the company had only $2.1 million in cash on hand at the time of the filing. 

The outlet added that the company used some of its remaining funds to ensure that $400,000 in recently issued paychecks would not bounce when employees attempted to cash them.

The franchiser emphasized that its signature brands such as Fatburger, Johnny Rockets and Round Table Pizza are expected to remain operating as usual during the Chapter 11 process.

The announcement comes after the company was impacted by the Los Angeles indictment of its CEO Andrew Wiederhorn. In 2024, the Department of Justice accused Wiederhorn of defrauding investors of $47 million through shareholder loans. He faced multiple charges, including wire fraud and tax evasion, but the case was ultimately dismissed in 2025 following the firing of the federal prosecutor.

FOX Business reached out to FAT Brands for more information.