FAT Brands Reports Revenue Decline and Increased Net Loss in Q2 2025

FAT Brands Inc. reported a decline in financial performance for the second quarter of 2025, with total revenue decreasing to $146.8 million, down 3.4% from $152.0 million in the same period last year. The decrease was primarily attributed to lower restaurant sales, which fell to $102.4 million from $107.4 million, driven by the closure of five underperforming Smokey Bones locations and a temporary closure for conversion into a Twin Peaks lodge. The company also experienced a drop in royalties and advertising fees, contributing to an overall revenue decline of $15.2 million, or 5.0%, for the first half of the fiscal year.

In terms of profitability, FAT Brands reported a net loss of $55.4 million for the second quarter, compared to a loss of $39.4 million in the prior year. The loss from operations was $15.6 million, significantly higher than the $2.7 million loss reported in the same quarter of 2024. The increase in losses was largely due to a 50.3% rise in general and administrative expenses, which reached $44.4 million, primarily driven by increased share-based compensation and professional fees related to ongoing litigation. Total costs and expenses for the quarter rose to $162.4 million, up from $154.7 million in the previous year.

Operationally, FAT Brands continues to expand its footprint, with approximately 2,300 locations open or under construction, of which about 92% are franchised. The company’s growth strategy includes acquiring new brands and expanding existing ones, although the recent closures have impacted overall performance. The company has also been involved in a spin-off transaction, distributing shares of Twin Hospitality Group Inc. to its shareholders, which has resulted in a non-controlling interest of $5.2 million on its balance sheet.

Looking ahead, FAT Brands faces challenges related to its liquidity, with an accumulated deficit of $553.6 million as of June 29, 2025. The company reported $7.6 million in unrestricted cash and negative working capital of $264.6 million. Management indicated that while they believe they have sufficient liquidity to meet operational needs over the next twelve months, additional financing may be required if operational plans are not met. The company is actively exploring options for financing through debt or equity to support its growth initiatives and manage its financial obligations.