Fatburger owner files for bankruptcy, overwhelmed by debt

FAT Brands Inc., the owner of Fatburger, has voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas to restructure its heavy debt load.

What just happened

• FAT Brands Inc., parent of Fatburger, Johnny Rockets, Twin Peaks, Round Table Pizza and other chains, commenced Chapter 11 proceedings in Texas on 26 January 2026.

• The company reported assets and liabilities both in the range of roughly 1 to 10 billion dollars, reflecting a highly leveraged balance sheet.​

• Management says the goal is to deleverage, strengthen the capital structure, and “maximize value” for stakeholders rather than liquidate the business.

Why they filed (debt problems)

• FAT Brands has around 1.3 billion dollars of securitized debt that was accelerated and declared immediately due after missed payments in late 2025, creating an acute liquidity crisis.

• A Jefferies‑backed fund and other bondholders have sued over alleged debt defaults and failure to deliver pledged Twin Peaks-related shares as collateral, increasing legal and financial pressure.

• The company also faced Nasdaq compliance issues, with its share price falling below the 1‑dollar minimum and the risk of delisting later in 2026.

What it means for restaurants and customers

• FAT Brands says its portfolio of more than 2,200 franchised and company-operated locations worldwide, including Fatburger and Johnny Rockets, is expected to stay open and operate as usual during the Chapter 11 process.

• The company employs or supports over 45,000 workers across its 18 brands, and it has emphasized maintaining normal operations for customers and franchisees while restructuring.

• For most diners, the near‑term impact is expected to be limited, with menus and day‑to‑day service continuing while the parent company negotiates with creditors.

Impact on investors

• FAT Brands’ Nasdaq‑listed shares are expected to keep trading, but the ticker will carry a “Q” suffix to indicate it is in bankruptcy proceedings.

• Court filings and company statements warn that existing equity could ultimately be canceled or heavily diluted depending on the final restructuring plan.

• Bondholder lawsuits and the complex securitized debt structure mean the outcome for different creditor groups may vary significantly as the case progresses.

If you tell me what you’re most interested in (customer impact, franchisees, or investing), I can focus on that angle next.