FAT Brands announced Tuesday it will take Twin Peaks public after hinting to do so several months ago.
The company, which will remain majority owner after the transaction, said the IPO is meant to unlock value for shareholders and facilitate continued growth. FAT Brands has not yet filed with the SEC.
“Twin Peaks was an exceptional acquisition for us in 2021,” Ken Kuick, FAT Brands co-CEO and CFO, said in a statement. “Led by veteran CEO Joe Hummel and a seasoned management team, Twin Peaks continues to produce industry-leading average unit volumes, with annual same-store sales increasing by 11.3 percent in 2022. We believe that creating a separate publicly traded company will provide the best opportunity to further enhance the brand, capitalize on its expansion plans and build upon its position as a leader in the sports lodge dining category.”
FAT Brands revealed in September 2021 that it was buying Twin Peaks for $300 million from Garnett Station Partners. At the time, the sports bar had 82 restaurants systemwide. Twin Peaks now has 100 stores, and new openings are earning significantly higher AUVs. In Q1, new DMAs Chattanooga and Daytona opened with $180,000 per week and $160,000 per week, respectively. On an annual basis, that would equate to a $9.4 million and $8.3 million AUV. CEO Joel Hummel said the brand’s same-store sales grew more than 4.3 percent in the first quarter and that inflation was starting to soften.
The brand plans to open 18–20 restaurants this year, putting it at around 115 locations by the end of 2023. That’s an almost 40 percent increase in unit count since FAT Brands took over. Going forward, Twin Peaks is equipped with a pipeline of 109 franchise units. The chain wants to reach 200 restaurants by 2027, including 25-28 stores internationally, and increase its franchise mix from 70 percent to 80 percent.
“Exciting to see the brand take off,” Hummel told FSR in May. “Even during a crisis like COVID, we were able to sustain our momentum, took a small pause like everybody did, but really picked the ball up and started running pretty fast after that.”
Twin Peaks going public is part of FAT Brands’ plan to pay down debt from its several acquisitions in recent years. Former CEO Andy Wiederhorn said the casual-dining chain is projected to become a $700 million to $1 billion concept in the coming years, and that a potential sale or IPO would put a dent in debt payments. The executive also said the company may pursue another purchase for the purpose of converting stores into Twin Peaks restaurants. If the brand reaches 150 to 170 units, that could bring $60 million to $75 million in EBITDA, making the chain worth around $1 billion, Wiederhorn told QSR in January.
Because of how different it is, Twin Peaks is the only one among FAT Brands’ 17 concepts that hasn’t been fully integrated in terms of accounting, legal, HR, and other departments.
FAT Brands said the timing and size of the IPO will be subject to market conditions and other factors.
