Executive Summary

Q4 2024 revenue was $145.3M, down 8.4% y/y due to a 13-week quarter vs. 14 weeks in Q4 2023, lower same-store sales, and Smokey Bones closures; net loss widened to $67.4M ($4.06) as the company recorded $30.6M non-cash impairments and higher other expenses including a loss on debt extinguishment .
Adjusted EBITDA was $14.4M; system-wide sales were $580.2M with system-wide same-store sales down 1.6%; 30 new stores opened in Q4 .
Strategic actions: spin-out of Twin Hospitality Group (Twin Peaks/Smokey Bones), plan to refranchise 57 company-owned Fazoli’s to move back to nearly 100% franchised model, and explore factory utilization expansion/third-party manufacturing .
Management expects to resume the common dividend after reducing Twin Hospitality debt by at least $25M (indenture restriction), targeting completion “over the next 60 days” from the call date; broader 2025 plan includes >100 openings and deleveraging via equity at Twin Hospitality .
Consensus estimates from S&P Global were unavailable at the time of writing; no beat/miss assessment could be performed.*

What Went Well and What Went Wrong

What Went Well
- Development and pipeline momentum: 92 openings in 2024; more than 100 planned in 2025; pipeline ~1,000 locations. “Our ability to grow demonstrates both strong consumer demand…” .
- Co-branding and format innovation: “Co-branded locations typically generate 10% to 20% higher incremental sales compared to single brand units” (e.g., Cookies + Marble Slab; tri-brands launched) .
- Factory economics and optionality: ~$38M sales at the Georgia facility with ~$15M profit (≈40% margin); targeted utilization increase to 60–70%, potential to reduce leverage via asset sale in the future .
What Went Wrong
- Same-store sales softness and week-count effect: Q4 revenue/system-wide sales declined vs. prior year mostly due to a 13-week quarter vs. 14 weeks and a 1.6% SSS decline .
- Impairment and profitability pressure: $30.6M non-cash goodwill/intangible impairment in Q4 tied to restaurant performance; adjusted EBITDA fell vs. Q4 2023 .
- Smokey Bones drag and interest burden: Smokey Bones underperformance (~$2.6M operating loss for FY) and higher interest/other expense weighed on results .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($USD Millions)	$152.0	$143.4	$145.3
(Loss) from Operations ($USD Millions)	$(2.703)	$(8.833)	$(39.303)
Net Loss ($USD Millions)	$(39.359)	$(44.755)	$(67.418)
Diluted EPS ($)	$(2.43)	$(2.74)	$(4.06)
Adjusted EBITDA ($USD Millions)	$15.7	$14.1	$14.4
Adjusted Net Loss ($USD Millions)	$(30.904)	$(38.017)	$(29.919)
System-wide Sales ($USD Millions)	$614.7	$600.7	$580.2
System-wide SSS (%)	-1.6%	-2.6%	-1.6%

Segment Revenue Breakdown

Revenue Component ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Royalties	$23.318	$22.353	$22.416
Restaurant Sales	$107.410	$99.238	$100.893
Advertising Fees (Revenue)	$10.065	$9.708	$9.903
Factory Revenues	$9.636	$9.490	$9.351
Franchise Fees	$1.113	$2.576	$1.317
Other Revenue	$0.498	$1.098	$1.400
Total Revenue	$152.040	$143.365	$145.280

Selected KPIs and Costs

KPI / Cost	Q2 2024	Q3 2024	Q4 2024
New Store Openings (Units)	24	22	30
Interest Expense ($USD Millions)	$29.586	$31.109	$30.262
Advertising Expense ($USD Millions)	$14.651	$10.032	$11.825
Impairment ($USD Millions)	—	—	$30.600

Why performance changed in Q4: the shorter quarter (13 vs. 14 weeks) reduced reported sales and royalties; closures tied to Smokey Bones conversions further impacted revenue; non-cash impairments and refinancing charges increased losses; management cited conversions/closures and week-count as primary drivers .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common Dividend	Q1 2025	Historically declared $0.14 per quarter in FY 2024	Temporarily paused until $25M principal reduction at Twin Hospitality; management expects completion “over the next 60 days” and to declare/pay Q1 dividend thereafter	Delayed, expected resumption post debt reduction
Store Openings	FY 2025	Targeted ~100 openings in FY 2024	“Expect to add more than 100 additional restaurants” in 2025	Target reiterated (>100)
Twin Hospitality Deleveraging	FY 2025	Planned Twin Peaks refi ahead of public transaction	Raise equity; reduce Twin Hospitality debt by $75M+ in 2025 including ≥$25M by late April	New specific targets
Refranchising	FY 2025	N/A	Refranchise 57 company-owned Fazoli’s; retain only 33 Hot Dog on a Stick company-owned; “nearly 100% franchised”	New initiative
Factory Utilization	FY 2025	Utilization ~40–45%; pursuing third-party programs	Target ~60–70% utilization; explore optional sale to reduce leverage longer-term	Maintained/expanded target focus

No formal quantitative revenue/EPS margin guidance ranges were provided for FY 2025/Q1 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Deleveraging & Refinancing	Plan to refinance Twin Peaks ahead of IPO/alt transaction; address other securitizations; focus on reducing interest burden	Commit to $75M Twin Hospitality debt reduction (≥$25M by late April); refinancing Twin Peaks completed/underway	Accelerating execution
Twin Hospitality Spin-out	Confidential registration (Q3); preparation	Spin-out completed; 5% distributed to shareholders; TWNP trades on NASDAQ; FAT retains ~85%	Executed
Factory Utilization	Q2 factory EBITDA $3.8M; ~45% utilization; third-party RFPs in flight	Target 60–70% utilization; optional sale considered for deleveraging	Expansion and optionality
Co-brand Strategy	Fatburger + Round Table expansion; >50 co-branded pipeline (Q2)	Tri-brands launched; co-brands deliver 10–20% higher sales	Broadening rollouts
SSS Trajectory	-1.6% SSS (Q2); YTD -2.7% (Q3); sequential stabilization noted	Q4 SSS -1.6%; week-count effects emphasized	Stabilizing
Litigation/Legal	Material costs (Q2/Q3)	Management optimistic bulk of litigation resolves in 2025; potential insurance recovery (target Q2)	Potential resolution

Management Commentary

“We kicked off 2025 with a major milestone, the spin-out of Twin Hospitality Group Inc., creating a separate publicly traded company… A key strategic priority for us this year is maximizing the value creation at Twin Hospitality on behalf of our stockholders.” — Ken Kuick .
“By removing Twin Peaks and Smokey Bones from our portfolio… We now plan to refranchise our 57 company-owned Fazoli’s locations… This will return us to being nearly 100% franchised.” — Rob Rosen .
“Co-branded locations typically generate 10% to 20% higher incremental sales compared to single brand units.” — Andrew Wiederhorn .
“We have approximately $150 million in available-for-sale securities… we sell them into the market to generate cash… and an ATM on file… we anticipate raising equity at the Twin Peaks level… to reduce some of our Twin Peaks corporate debt.” — Andrew Wiederhorn .
“Once these units are open, we expect them to generate approximately $50 million in incremental annual adjusted EBITDA.” — Andrew Wiederhorn .

Q&A Highlights

Smokey Bones drag quantified: operating loss of ~$2.6M for FY; underperformance impacted results until conversions complete .
Litigation costs outlook: Management hopes to resolve bulk of litigation in 2025 and recover some fees via insurance, potentially by Q2 .
Liquidity: ~$150M available-for-sale bond portfolio; ATM available; plan for equity raise at Twin Peaks to reduce debt and repay intercompany balances .
Conversion cadence: Majority of Smokey Bones conversions over next 24 months; ~30 locations suitable; complexities include master lease restrictions and alcohol limits .
Segment performance: Fazoli’s (QSR) pressured by price sensitivity; Round Table Pizza and cookies/ice cream described as strong; weather noted as headwind early in 2025 .

Estimates Context

Q4 2024 Wall Street consensus (S&P Global) was unavailable at the time of writing due to data access limitations; as a result, we cannot assess beats/misses vs. estimates.*

Where estimates may adjust: With non-cash impairments and interest burden evident, and near-term conversion-related closures, street models may lower near-term EPS while factoring in deleveraging catalysts (Twin Hospitality equity raise/debt reduction), refranchising, and factory utilization gains .

Key Takeaways for Investors

The y/y revenue decline is largely mechanical (13 vs. 14 weeks), not necessarily indicative of structural demand weakness; management quantified the one-week impact at ~$45–50M sales with royalty and store-level EBITDA implications .
Impairment charges ($30.6M) and refinancing costs drove headline losses; adjusted EBITDA of $14.4M reflects core operations amid conversions and closures .
Deleveraging roadmap has near-term benchmarks (≥$25M Twin Hospitality debt reduction to restore dividend) and broader $75M 2025 target; refi progress is a key catalyst for equity value and cash flow .
Refranchising 57 Fazoli’s and retaining only 33 Hot Dog on a Stick company-owned units should reduce OpEx/volatility and support a franchise-heavy margin structure over time .
Factory’s 40% margin and underutilized capacity present a high-ROI growth lever (60–70% target); optional monetization could accelerate deleveraging .
Twin Peaks conversions show strong uplift (Lakeland conversion from ~$3.6M to ~$8.3M run-rate), underpinning system sales growth potential as conversions accelerate .
SSS trends are stabilizing (-1.6% in Q4); cookie/ice cream, pizza, and burger categories look healthier vs. price-sensitive QSR, supporting mix-driven resilience into 2025 .

*Consensus estimates were unavailable via S&P Global at time of writing; therefore, no beat/miss comparison is provided.

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