FAT Brands Announces Amendments to Fazoli’s Securitization

Rhea-AI Summary

FAT Brands (NASDAQ: FAT) has announced key amendments to its Fazoli's Securitization credit facility, enhancing financial flexibility for its Fazoli's and Native Grill & Wings restaurant brands. The modifications include:

• Extension of Class A-2 Notes' Anticipated Repayment Date from January 2025 to July 2026
• Extension of all Notes' Anticipated Call Date from July 2023 to October 2025
• Relaxation of financial covenants related to debt service coverage and leverage ratios, deferred to 2026
• New provisions allowing the refranchising of 57 corporate-owned Fazoli's restaurants

If not repaid or refinanced by the new dates, additional interest will accrue: 2.5% per annum on Class A-2 Notes after the Repayment Date, and 1.0% per annum on each tranche after the Call Date.

Positive

• Extended repayment timeline provides improved financial flexibility
• Relaxed financial covenants reduce risk of triggering default events
• New ability to refranchise 57 corporate-owned Fazoli's restaurants could improve cash flow

Negative

• Additional 2.5% interest penalty if Class A-2 Notes not repaid by July 2026
• Extra 1.0% interest on all tranches if not refinanced by October 2025

LOS ANGELES, April 04, 2025 (GLOBE NEWSWIRE) -- FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”), a leading global franchising company and parent company of iconic brands including Round Table Pizza, Fatburger, Johnny Rockets, Twin Peaks, Fazoli’s and 13 other restaurant concepts, announces amendments to its whole business securitization credit facility for its Fazoli’s and Native Grill & Wings restaurant brands (the “Fazoli’s Securitization”).

The amendments to the Fazoli’s Securitization include the following key features:

• The “Anticipated Repayment Date” of the Class A-2 Notes has been extended from January 2025 to July 2026. If the Class A-2 Notes are not repaid or refinanced by the Anticipated Repayment Date, additional interest of 2.5% per annum will accrue on the Class A-2 Notes.
  
  
• The “Anticipated Call Date” of all tranches of Notes issued under the Fazoli’s Securitization has been extended from July 2023 to October 2025. If the Notes are not repaid or refinanced by the Anticipated Call Date, additional interest of 1.0% per annum will accrue on each tranche of Notes.
  
  
• Certain financial covenants tied to debt service coverage ratios or leverage ratios that, if triggered, could cause a “Rapid Amortization Event”, “Cash Flow Sweeping Event” or “Event of Default” under the Fazoli’s Securitization have been relaxed or deferred to dates in 2026.
  
  
• The bond indenture has been amended to allow sales of company restaurants to franchisees for conversion to franchised restaurants, permitting the Company to refranchise all or a portion of its corporate-owned Fazoli’s restaurants.                   

Andy Wiederhorn, Chairman of FAT Brands, said, “We are pleased to announce the successful amendment of the Fazoli’s credit facility, resulting in improved terms that enhance our financial flexibility. The amended terms have extended both the call date and repayment date while relaxing certain covenants, providing us with greater operational flexibility for Fazoli’s. Importantly, the new agreement also permits the disposition of corporate stores to franchisees, which would allow for the refranchising of the 57 corporate owned Fazoli’s restaurants. These amendments reflect the strong partnership we have built with our lenders and their continued confidence in our business.”

For more information on FAT Brands, please visit www.fatbrands.com.

About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Smokey Bones, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial performance of the Fazoli’s and Native Grill & Wings brands and their securitization financing. Forward-looking statements reflect expectations of FAT Brands Inc. (“we” or “our”) concerning the future and are subject to significant business, economic and competitive risks, uncertainties and contingencies. These factors are difficult to predict and beyond our control, and could cause actual results to differ materially from those expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other factors. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this press release.

MEDIA CONTACT:
Erin Mandzik
emandzik@fatbrands.com
860-212-6509

FAQ

What are the key changes to FAT Brands' Fazoli's Securitization credit facility?

The key changes include extending the Class A-2 Notes repayment date to July 2026, pushing the call date to October 2025, relaxing financial covenants, and allowing refranchising of corporate-owned restaurants.

How many Fazoli's corporate-owned restaurants can FAT Brands potentially refranchise?

FAT Brands can refranchise all 57 corporate-owned Fazoli's restaurants under the new agreement.

What additional interest will FAT Brands face if it doesn't meet the new repayment deadlines?

FAT will face 2.5% additional annual interest on Class A-2 Notes after July 2026 and 1.0% on all tranches after October 2025.

When is the new Anticipated Call Date for FAT Brands' Fazoli's Securitization Notes?

The new Anticipated Call Date has been extended from July 2023 to October 2025.

What financial covenants were modified in FAT Brands' Fazoli's credit facility?

Covenants related to debt service coverage ratios and leverage ratios were relaxed and deferred to 2026 to prevent triggering rapid amortization or default events.