FAT Brands announced Monday that it purchased Smokey Bones for $30 million, adding to a portfolio that already spans roughly 2,300 restaurants globally. The acquisition is expected to raise annual adjusted EBITDA by roughly $10 million.
The barbecue concept, with 61 locations in 16 states, is the 18th brand to join the company. The others are Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, 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.
FAT Brands counts it as the second polished casual-dining chain, with Twin Peaks being the other. The company acquired Smokey Bones from Sun Capital Partners, the same private equity firm it bought Johnny Rockets from back in 2020.
“As we have spent the year focusing on digesting past acquisitions, we’ve also been amplifying the explosive growth in our polished dining vertical,” FAT Brands chairman and founder Andy Wiederhorn said in a statement. “Having a strong player in the barbecue space provides another arrow in our quiver for the polished dining segment and opens the door for additional growth strategies for our sister brands.”
The announcement comes about four months after Hal Lawlor was promoted to Smokey Bones president. He succeeded James O’Reilly, who joined Perkins and Huddle House parent Ascent Hospitality Management as CEO.
The barbecue concept spent most of the pandemic innovating around off-premises. By August 2020, virtual brands the Burger Experience and Wing Experience were available in all of its brick-and-mortar kitchens across the country. Last year, the brand attempted a virtual food hall that housed Smokey Bones, The Wing Experience, and Burger Experience, plus two other virtual brands Bowl Market and Tender Box.
Additionally, in June 2022, the full-service brand opened a restaurant equipped with a digital drive-thru lane in Bowling Green, Kentucky, complete with digital ordering boards, digital order confirmation, high-quality audio, and a drive-up window for express menu pickup.
“We are excited to become a part of the FAT Brands family and benefit from their purchasing power and scale,” Lawlor said in a statement. “Additionally, we see great opportunity in being a part of a leading global franchising company to further our growth with new franchised locations.”
During the pandemic, FAT Brands first purchased Johnny Rockets for $25 million in September 2020. The following year, it bought Global Franchise Group (Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, and Pretzelmaker) for about $445 million, Twin Peaks for $300 million, Fazoli’s for $130 million, and Native Grill & Wings for $20 million. It then purchased Nestlé Toll House Café in late 2022 to convert locations to Great American Cookies.
Wiederhorn told QSR early this year that FAT Brands would still be in the M&A market, although the move would be strategic. It had to be a new food category and there had to be valuable synergies. The chairman also said he wasn’t interested in any turnaround efforts.
Smokey Bones fits the bill, according to FAT Brands co-CEO Rob Rosen.
“We continue to be selective and opportunistic in our acquisition strategy, targeting brands that are both scalable and synergistic with our existing platform,” Rosen said in a statement. “We are pleased to add another polished dining brand, which will provide more options for our sales team to offer our franchise partners to further their new unit development.”