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FAT Brands Inc. FAT has opened a new tri-branded restaurant in Roanoke, TX, featuring the beloved snack concepts, Great American Cookies, Marble Slab Creamery and Pretzelmaker.
The new location aims to expand the company's presence in the Dallas area, offering a variety of snack concepts in one establishment.
FAT Enhances Offering With the Tri-Branded Model
Following the success of its co-branded Great American Cookies and Marble Slab Creamery locations, FAT Brands sees strong potential to expand by adding Pretzelmaker for a tri-branded experience.
The company has observed an increase in snacking occasions across the industry and believes this model will offer a broader variety of sweet and savory options. FAT plans to continue strategically expanding this tri-branded concept.
FAT Brands' Co-Branding & Expansion Initiatives
FAT Brands has made significant strides in expanding its brand portfolio and global footprint over the past few years. The company has successfully added 18 distinct concepts in the last three years, boosting its market presence.
In the third quarter of 2024, FAT Brands opened 22 new units, bringing its year-to-date total through the quarter to 62 units. On the third-quarter earnings call, FAT highlighted a strong development pipeline with signed agreements for around 1,000 new units in the coming years. Once fully operational, these units are expected to add $50 million to $60 million to its annual adjusted EBITDA. This increase in earnings will help reduce leverage over time, improving the company's balance sheet.
In addition to expanding its brand portfolio and global presence, FAT Brands also continues to leverage co-branding as a key growth strategy. In September, the company launched a co-branded online ordering platform for Great American Cookies and Marble Slab Creamery, in partnership with 3 Owl and Olo. This platform aims to enhance the digital experience for customers. As part of its ongoing digital transformation, FAT also introduced a new loyalty program and app for brands, integrating ordering and rewards to drive higher average check sizes.
FAT Brands' Price Performance
Image Source: Zacks Investment Research
Shares of this multi-brand restaurant of America have gained 2.4% in the past three months against the Zacks Retail - Restaurants industry’s 5.6% decline. The company is benefiting from its focus on unit expansion and strategic acquisitions. Also, the emphasis on co-branding opportunities and digital initiatives bodes well for FAT’s growth prospects. However, elevated expenses are concerns.