Dive Brief:
- Fat Brands has opened its first co-branded Fatburger and Round Table Pizza restaurant in Dallas, the company said in a press release Wednesday.
- The 3,500-square-foot restaurant includes a full-service, full-bar casual restaurant and is the first of four such co-branded units planned in the Dallas market. The locations will be operated by franchisee SNM Management Group.
- Fat Brands, which owns 17 restaurant concepts, has leaned heavily on its co-branding strategy, allowing new and existing operators to open multiple concepts in one location to grow revenue.
Dive Insight:
Fat Brands has hundreds of other co-branded restaurants, including Fatburger/Buffalo’s Express, that it has been co-branding since 2013. In addition to benefits for franchisees, these types of units appeal to landlords because they help diversify the tenant mix.
The company has been co-branding Marble Slab Creameries with Great American Cookies locations, and had 125 such units in 2022. Last year, it opened its first tri-branded location in Los Angeles with a Fatburger, Buffalo’s Express and Hot Dog on a Stick. It also opened its first co-branded Johnny Rockets and Hurricane Wings Restaurant last year in Washington, D.C.
Co-branding has been a key strategy for Fat’s international growth, as well. During the second quarter, Fat signed several development deals to open over 30 co-branded and franchised locations in Iraq, including 12 co-branded Fatburgers and Buffalo’s Express locations, 10 co-branded Great American Cookie and Marble Slab Creamery relocations and 10 Hot Dog on a Stick locations, Andy Wiederhorn, Fat’s chairman of the board, said during an August earnings call.
The holding company has been aggressively growing its concepts and now has a pipeline of over 1,100 signed agreements for new units over the next few years, as of the August earnings call. This pipeline will add about $60 million in incremental adjusted EBITDA, Wiederhorn said. The company could add more to its development pipeline following the completion of its $30 million Smokey Bones acquisition, as the brand is company-owned and could benefit from Fat’s franchising strategy. Fat initially plans to convert 40 Smokey Bones out of its 61 units to Twin Peaks to help Twin Peaks grow as it heads toward a potential 2024 IPO.
