FAT Brands Reports Decline in Revenue and Increased Net Loss for Third Quarter of Fiscal 2025

FAT Brands Inc. reported a decline in financial performance for the third quarter and the first three quarters of fiscal 2025, as detailed in its latest 10-Q filing. For the thirteen weeks ended September 28, 2025, total revenue was $140.0 million, a decrease of 2.3% from $143.4 million in the same period last year. The decline was primarily attributed to reduced restaurant sales, which fell to $96.6 million from $99.2 million, driven by the closure of 11 underperforming Smokey Bones locations and lower same-store sales. For the thirty-nine weeks ended September 28, 2025, total revenue decreased by 4.1% to $428.9 million compared to $447.4 million in the prior year, with similar factors impacting performance.

The company's net loss for the third quarter was $59.5 million, compared to a loss of $44.8 million in the same quarter of 2024. This loss included a significant increase in general and administrative expenses, which rose by 23.7% to $42.7 million, largely due to costs associated with the closure of Smokey Bones locations and increased share-based compensation. For the first three quarters of 2025, the net loss was $161.1 million, up from $122.4 million in the previous year, reflecting ongoing operational challenges and increased interest expenses.

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 is focused on its growth strategy, which includes acquiring new brands and expanding existing ones. However, the recent closures and underperformance of certain locations have raised concerns about its operational efficiency and market share. The company has also faced challenges related to its debt obligations, with a significant portion of its long-term debt classified as current liabilities due to defaults on its Securitization Notes.

Looking ahead, FAT Brands faces substantial liquidity challenges, with unrestricted cash of only $2.1 million as of September 28, 2025. The company has acknowledged that it may not be able to meet its cash obligations in the coming year without restructuring its debt or obtaining relief from noteholders. The ongoing discussions with noteholders regarding potential refinancing or restructuring transactions are critical to the company's future viability. The filing indicates that these factors create substantial doubt about the company's ability to continue as a going concern, emphasizing the need for strategic financial management in the near term.