HOUSTON, January 27, 2026, 19:59 CST
- FAT Brands and its affiliate Twin Hospitality filed for Chapter 11 bankruptcy in Texas, assuring that their restaurants will continue running.
- Filings reveal strained cash flow and significant debt, alongside missed interest payments and the appointment of restructuring officers.
- Shares of FAT Brands and Twin Hospitality tumbled roughly one-third in late trading.
FAT Brands, the company behind Fatburger and Johnny Rockets, filed for Chapter 11 bankruptcy protection in Houston late Monday. The move came alongside affiliate Twin Hospitality Group, which owns Twin Peaks and Smokey Bones.
Chapter 11 is a U.S. legal tool allowing companies to restructure debt without shutting down. These filings spotlight franchise-heavy chains that took on heavy borrowing but are now squeezed by rising costs and a drop in casual dining spending.
Court documents reveal FAT Brands filed for bankruptcy holding $2.1 million in cash against roughly $1.4 billion in debt. On Tuesday, a judge approved the company’s request to use some of that cash to cover about $400,000 in employee paychecks. Since 2022, FAT Brands has shelled out $72 million in interest penalties and amortization, plus around $85 million in legal costs dating back to 2021. The filings also note a 2024 Justice Department case accusing former CEO Andrew Wiederhorn of taking $47 million in undisclosed loans was dismissed in August 2025. Meanwhile, the SEC reportedly reached an agreement in principle to settle its civil suit. (Reuters)
The franchiser failed to make interest payments due in October on part of its roughly $1.2 billion whole-business securitisation debt. Creditors then pushed for full repayment, a move the company warned could trigger bankruptcy. This debt structure pools franchise royalties and other cash flows into bonds, a model used by brands like Hooters, TGI Friday’s, and Red Lobster. FAT Brands reported assets and liabilities falling between $1 billion and $10 billion, listing Sysco and DoorDash among its largest unsecured creditors. (The Straits Times)
FAT Brands said in a statement its 18-brand portfolio will keep running through the court proceedings. Nasdaq trading is set to continue, but with a “Q” added to the ticker to signal bankruptcy. CEO Andy Wiederhorn said the chapter 11 process offers a chance to shore up the company’s capital structure. (GlobeNewswire)
Twin Hospitality confirmed that Twin Peaks and Smokey Bones will remain open, adding that its Nasdaq ticker will likely trade with a “Q” suffix during the bankruptcy proceedings. “The chapter 11 process will enable us to strengthen our balance sheet and create financial flexibility,” said Wiederhorn. The company operates 114 locations across the U.S. and Mexico, it noted. (GlobeNewswire)
An update sent to investors revealed that Twin Hospitality has broadened its board, bringing on restructuring experts Patrick Bartels and Neal Goldman. It also appointed John DiDonato from Huron Consulting as chief restructuring officer, with Abhimanyu Gupta stepping in as deputy. The notice cautioned that common shareholders might suffer a total or substantial loss, depending on the outcome of the case. (TipRanks)
Twin Hospitality’s Form 8-K revealed the filing instantly triggered defaults on roughly $403 million of secured notes and around $4 million in equipment financing. The company plans to request emergency “first-day” relief at a hearing set for January 28 to continue operating as a debtor-in-possession, allowing management to remain in charge under court oversight.
FAT Brands runs roughly 150 restaurants itself and has over 1,900 franchised locations. The company says its franchise partners employ around 45,000 people globally. It holds ownership of 18 brands, among them Round Table Pizza, Fazoli’s, and Twin Peaks.
FAT Brands shares plunged roughly 34%, while Twin Hospitality also fell about 34% in late trading.
Both firms insist stores will stay open, but the bankruptcy depends on fast court sign-offs for routine payments and a debt-reduction plan creditors back. Filings and investor alerts highlight a major risk: shareholders might walk away with almost nothing if creditors take control of the restructuring.
