It marks the company's eighth acquisition in 10 years.
FAT Brands, parent of Johnny Rockets and Fatburger, has agreed to purchase sports bar Twin Peaks for $300 million.
The 82-unit concept is expected to increase FAT Brands' systemwide sales from roughly $1.4 billion to more than $1.8 billion across more than 2,100 franchised and company-owned stores globally. The acquisition is also expected to raise the company's post-COVID normalized EBITDA by roughly $25 million to $30 million, including six Twin Peaks stores yet to open this year and another 18 under development over the next 18 months. The incoming chain's new units see AUVs between $4.5 million to $6.5 million. Roughly 70 percent of Twin Peaks' stores are franchised.
“The sale of Twin Peaks to FAT Brands marks a major milestone for us after a year of consistent sales growth as we work towards our vision of becoming a global-facing brand,” said Twin Peaks CEO Joe Hummel in a statement. “FAT Brands has a proven track record of scaling and introducing concepts to international markets. We’re excited to be part of Andy’s vision as he continues to build FAT Brands.”
Twin Peaks will be the 15th brand under Fat Brands' umbrella. The move comes two months after the company agreed to pay $442.5 million to acquire Global Franchise Group, which franchises quick-service brands Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, and Pretzelmaker. Other chains owned by Fat Brands include Johnny Rockets, Fatburger, Hurricane Grill & Wings, Buffalo’s Café, Buffalo’s Express, Elevation Burger, Ponderosa Steakhouse, Bonanza Steakhouse, and Yalla Mediterranean.
Hummel told FSR in late July that Twin Peaks should top the 100-unit mark sometime in late summer 2022. And by the beginning of 2027, he expects the brand to reach more than 275 stores. To fuel growth, Twin Peaks hired industry veterans Glenn Moon and John Brisco to oversee domestic and international franchise development, respectively. Moon has more than 15 years of experience in hospitality investment, real estate development, and franchise sales experience, while Brisco was responsible for major growth at Ruby Tuesday and Sbarro.
The chain will be sold by private equity firm Garnett Station Partners, which invested in the brand in March 2019. Since then, unit count has increased by roughly 15 percent and grown adjusted earnings have lifted by about 50 percent. Same-store sales and company revenue have "significantly" grown, as well.
FAT Brands CEO Andy Wiederhorn said the purchase is part of the company's plan to "expand our market segments into sports and polished casual dining."
"The exceptional unit economics and proven track record of the Twin Peaks brand has led to extraordinary demand for new store openings from new and existing franchisees," Wiederhorn said in a statement. "The current pipeline of new franchise locations as well as the large potential for global expansion of this successful brand is what brought us to the table and makes this a truly unique acquisition for FAT Brands. We’re pleased to have the support of Garnett Station Partners as we continue the expansion of Twin Peaks into new markets.”
Widerhorn and FAT Brands have finalized more than a half-dozen acquisitions in the past decade, including Buffalo's Café (2011), Ponderosa Steakhouse and Bonanza Steakhouse (2017), Hurricane Grill & Wings (2018), Yalla Mediterranean (2018), Elevation Burger (2019), Johnny Rockets (2020), and Global Franchise Group (2021). During that run, FAT Brands completed its IPO in 2017, raising $24 million.
Duff & Phelps Securities, LLC served as financial advisor and Kirkland & Ellis LLP acted as legal counsel to Garnett Station Partners. Greenberg Traurig LLP acted as legal counsel to FAT Brands Inc.