Navigating Changes and Challenges: The Story of Fat Brands' Operational Evolution
Discover how Fat Brands navigated through leadership changes, franchising strategies, and declining same-store sales in recent years.
Photo by AllGo - An App For Plus Size People on Unsplash
Photo by AllGo - An App For Plus Size People on Unsplash
Co-CEO Change and Continuity in Leadership
The recent co-CEO change at Fat Brands has brought Taylor Wiederhorn, with a background as the chief development officer, to the helm. Despite the challenges faced by the company, continuity in leadership signals a commitment to steering the brand through turbulent times. Taylor Wiederhorn's extensive experience within the organization, especially in development, positions him well to lead the company through its transformation phase.
Photo by AllGo - An App For Plus Size People on Unsplash
Franchising Strategy and Business Expansion
Fat Brands has been able to expand its footprint significantly through a franchised unit development model. While the pace of new store openings has slowed down since 2022, the brand has shown resilience and adaptability in pursuing avenues like refranchising company-owned units. By transitioning towards almost entirely franchisee-operated stores, Fat Brands aims to streamline operations, enhance brand consistency, and drive growth in a more sustainable manner.
Photo by AllGo - An App For Plus Size People on Unsplash
Adapting to Declining Same-Store Sales
Like many players in the industry, Fat Brands has grappled with declining same-store sales in recent years. Despite facing challenges with this metric, the company managed to drive systemwide sales growth in Q4, primarily attributed to the scale of new store openings. This shift in focus towards expanding the store network demonstrates Fat Brands' proactive approach to mitigating the impact of declining same-store sales.
Financial Performance and Strategic Shifts
The financial landscape at Fat Brands saw a notable change with net losses more than doubling from 2023 to 2024. However, strategic moves like the spinoff of Twin Peaks and the emphasis on refranchising are indicative of a broader operational shift within the company. These decisions not only aim to improve financial performance but also align with the brand's strategy to optimize its operational structure for long-term success.
