Josh Dillon's questions to Fat Brands (FAT) leadership • Q4 2024
Question
Inquired about the reasons for missing the store opening target for the year, the differential impact of consumer spending across the brand portfolio, and the current M&A pipeline and strategy.
Answer
The shortfall in store openings (92 vs. a target of 100+) was attributed to minor slippage into 2025 caused by franchisee financing and construction delays, but the development pipeline remains strong. Consumer spending weakness affected the QSR sector, particularly Fazoli's, though a turnaround is beginning. In contrast, Round Table Pizza and dessert concepts have seen positive performance. The company's current focus is on deleveraging and organic growth rather than M&A due to the high cost of capital, although they are pursuing a couple of highly strategic targets.