FAT Brands Inc. Eyes Unprecedented 85% Stock Surge Amid Global Expansion

International franchise company FAT Brands Inc. FAT is eyeing a potential 85% upturn in its stock resulting from robust financial outcomes and a striking expansion plan amid pandemic-induced industry commotion, according to Income Investors.

FAT Brand's underestimated stock seized the market’s attention with its promising growth prospects. The corporation, which owns 18 restaurant brands such as Fatburger, Hurricane Grill & Wings, Ponderosa Steakhouse and Twin Peaks, manages roughly 2,300 restaurant locations worldwide.

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FAT Brands exhibited resilience during the COVID-19 pandemic’s sector turbulence by expanding its presence. The firm’s entry into the barbecue category followed the $30 million acquisition of Smokey Bones Bar & Fire Grill in 2023. The company also unveiled plans to establish 40 Marble Slab Creamery franchise outlets across Canada, reinforcing its regional dominance.

The franchise corporation reported the addition of 125 new stores and over 200 shops to its pipeline in 2023, highlighting organic growth. The firm opened restaurants in nontraditional locations such as airports, hospitals and amusement parks. FAT Brands anticipates launching 150 sites this year, expanding brands like Fazoli's, Great American Cookies and Marble Slab Creamery into new territories.

The company reported a 52.8% year-over-year surge in revenue to $158.6 million, although same-store sales experienced a 0.6% decline. Full-year 2023 revenue rose by 18% to $480.5 million, representing 0.8% systemwide same-store sales growth. 

“We are seeing strong franchisee interest in development opportunities, having signed more than 225 development agreements in 2023, bringing our total pipeline to 1,100 units. This represents the potential for over 50% EBITDA growth over the next several years.” FAT Brands Chairman Andy Wiederhorn said.

The restaurant operator's success resulted in robust investor dividends, with consistent quarterly payouts since its raise in September 2022. FAT Brands’ stocks rallied 32.64% in 2023 and climbed another 36% so far in 2024. Despite the recent rises, financial experts forecast an 85% jump in FAT Brands’ stock, indicating an optimistic outlook.

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