FAT Brands Inc. announced that it has agreed to acquire Fazoli’s restaurant chain for $130 million. The acquisition brings the largest premium quick-service Italian chain in the United States to the FAT Brands portfolio.
FAT Brands (Fresh. Authentic. Tasty.), based in Los Angeles, is a leading global franchising company that strategically acquires, markets and develops fast casual and casual dining restaurant concepts worldwide. The company currently owns 15 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Bualo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises more than 2,100 units worldwide.
The Fazoli’s transaction, funded with cash from the issuance of new notes from the company’s securitization facilities, is expected to close by mid-December.
Founded in Lexington in 1988, Fazoli's owns and operates nearly 220 restaurants in 28 states. Following years of decline, Fazoli's unit sales and profits have risen steadily over the past several years as the company raised food quality and reinvested in its system.
The addition of Fazoli’s existing locations, as well as a development pipeline of 100 new stores due to open or under development over the next several years, is expected to increase the FAT Brand’s post-COVID normalized EBITDA by approximately $14.5 to $15 million in 2022, company officials said.
“Fazoli’s has a great growth story, in particular, over the last year. They continue to surpass sales expectations across the board,” said FAT Brands CEO Andy Wiederhorn. “We have been eyeing this category for some time; however, we were waiting for the right brand — one that is high-growth, with almost all restaurants having drive-through access, in addition to, the synergies that we will achieve adding Fazoli’s to our portfolio of brands.”
“We have had an outstanding year and we couldn’t be more pleased to join forces with FAT Brands, a company that has the same growth-oriented mentality as us at Fazoli’s,” said Carl Howard, CEO of Fazoli’s. “From co-branding to virtual kitchens to menu development opportunities, we see great value in being a part of FAT Brands.”