Fatburger Bounces Back After Bankruptcy

: Chris Lee Law Firm

  Filed under: News

Fatburger is a popular casual dining chain around the U.S. However, nutritional challenges and the recession began putting pressure on the company’s profits since the early 2000s. After filing for Chapter 11 in 2009, the company has trimmed the financial fat and bounced back into profitability.

How They Did It

CEO Andy Wiederhorn purchased Fatburger in 2003, right before the peak of financial disaster. With the decision to be a successful business bankruptcy story, his wish came true after three long years fighting back.

The first step was debt reduction. The company was able to reduce their debt burdens from $35 million to less than $8 million over the last few years. Restructuring operations and cutting expenses, these Fatburger locations became cash-flow positive by 2011.

The next step was negotiation. Wiederhorn sought to renegotiate leases for locations, iron out new terms with key suppliers, and opened up the doors as a franchise model. Allowing for ownership stake in the company, the franchise model has helped the company modify relationships with their suppliers and creditors.

The last step was expansion. By opening up locations outside of the United States, Wiederhorn was able to explore a new set of opportunities for growth and capital. The first international location was opened in Canada in 2006, and now has half of its locations sprinkled around the globe. Fatburger is now working on a deal to bring hundreds of locations to Europe, Asia and the Middle East in the coming years.

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