FAT Brands, Inc. (FAT) Q1 2023 Earnings Call Transcript


Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the FAT Brands Inc. First Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded today, May 8, 2023.

On the call from FAT Brands are Chairman of the Board, Andy Wiederhorn; and co-Chief Executive and Chief Financial Officer, Ken Kuick and Rob Rosen. This afternoon, the company made its first quarter 2023 financial results publicly available. Please refer to the earnings release and earnings supplement, both of which are available in the Investors section on our website at Each contain additional details about the first quarter, which closed on March 26, 2023.

But before we begin, I must remind everyone that part of the discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. Actual results may differ materially from those indicated by these forward-looking statements due to a number of risks and uncertainties. The company does not undertake to update these forward-looking statements at a later date. For more detailed discussion of the risks that could impact future operating results and financial conditions, please see today’s earnings release and recent SEC filings.

During today’s call, the company will discuss non-GAAP financial measures, which it believes can be useful in evaluating its performance. The presentation of this additional information should not be considered in isolation nor as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are available in today’s earnings release.

I would now like to turn the call over to Andy Wiederhorn, chairman of the board.

Andrew Wiederhorn

Thank you, operator, and hello, everyone, and thank you all for joining us on the call today. This afternoon, we made our first quarter 2023 financial results publicly available. Please refer to the earnings release and our earnings supplement, both of which are available in the Investors section of our website at Each contain additional details about the first quarter, which closed March 26.

Let me begin by thanking our teams, franchisees and their employees for their hard work as we continue to grow this business. Last week, Ken Kuick and Rob Rosen were named co-Chief Executive Officers, effective May 5. Both Ken and Rob joined FAT Brands in 2021 and have played an integral role in our strategic growth initiatives, including acquisitions and driving company profitability. Ken and Rob will also continue in their respective roles as Chief Financial Officer and Head of Debt Capital Markets, while assuming the co-CEO role.

Together, they will focus on driving forward the company’s overarching goals of increasing organic growth through new store openings, growing utilization of our manufacturing facility and bolstering the success of our high-growth brands, including Twin Peaks. I will continue in my new role as Chairman of the Board, which I was appointed to in March of 2023, where I will focus on our strategic direction, capital allocation and ensuring that we execute our business plan, while maintaining quality restaurant operations.

In stepping down from the CEO and President role, my goal is to remove the distraction of the personal investigation tied to me regarding matters from several years ago before our merger with Fog Cutter. Ken and Rob are taking the reins of the company with a fresh slate of directors and they support the growth and evolution of FAT Brands, including championing our talented executive team. We have taken the company from 3 brands to 17 iconic restaurant brands with over 2,000 units opened or under construction and system-wide sales of $2.2 billion annually over the last 5 years.

Today, FAT Brands is approximately the 25th largest restaurant company by unit count in the U.S. 95% of our restaurants are franchised. We have more than 750 different franchise owners, of which approximately half are multiunit operators. We operate in 40 countries in 48 U.S. states. Notably, 10 of our 17 brands were just named to Technomic’s 2023 top 500 list, which is determined by key growth metrics, such as sales and unit growth. I believe we are creating tremendous long-term shareholder value, as well as short-term dividend yield. Now turning to Q1 specifically. Total revenue grew 8.5% in the first quarter of 2023 to $105.7 million compared to $97.4 million in the first quarter of 2022. The increase reflects an increase in same-store sales and revenues from new restaurants.

Same-store sales increased 4.3% in the first quarter of 2023. We grew system-wide sales 9.9% to $550 million when compared to the prior year quarter of $504.9 million. Looking at profitability, we saw over a 26.8% increase in adjusted EBITDA to $19.2 million from Q1 2022 adjusted EBITDA of $15.1 million. On a trailing 12-month basis, adjusted EBITDA was $92.9 million.

Now I would like to discuss our 2-part growth strategy, consisting of organic growth and growth by acquisition. As you know, over the last 2 years, we have had a very robust acquisition strategy by acquiring 9 brands. Similar to 2022, this year, our focus will be on building upon our impressive organic growth pipeline. During the first quarter, we opened 41 units and for quarter 2 are slated to open 45 units.

In total, we are projected to open 175 new units this year, representing 25% unit growth from the prior year. Our total development pipeline of organic growth remains the strongest in our company’s history with agreements for more than 1,000 new restaurants over the next few years. We estimate this growth to be worth approximately $60 million of incremental adjusted EBITDA, which will raise our adjusted EBITDA to approximately $150 million. This is also noteworthy, as it will naturally delever our balance sheet.

Interest in FAT Brands concepts remain high, as our franchisees see value in building their portfolio within the FAT Brands family. We have signed 77 new franchise development deals year-to-date and expect to hit 100 by the end of this quarter. This is evidenced by an agreement to open 10 new co-branded Great American Cookies and Marble Slab Creamery locations in Puerto Rico. These locations are set to open over the next 5 years, the first 2 locations slated to open by 2024. Additionally, we signed a new development deal to bring 20 additional franchised Johnny Rockets locations to Mexico over the next 10 years. Johnny Rockets has been operating in New Mexico since 1991 and currently has approximately 25 restaurants throughout the country.

Also, we’ve signed a development agreement to bring 12 co-branded Fatburger and Buffalo’s Express restaurants and 10 co-branded Marble Slab Creamery and Great American Cookies locations to Iraq, adding to our existing restaurants in that country.

We also continue to innovate with our brands, creating additional opportunities for our franchisees. During the quarter, Pretzelmaker opened its first drive-thru location in Iowa. Since opening the location has performed incredibly well, paving the way for future growth of the store model across the globe.

As part of our organic growth strategy, we’re also laser-focused on the accelerated development of Twin Peaks based on the strong economics and the long-term growth potential we see for the brand. Twin Peaks continues to produce industry-leading AUVs of around $6 million, with some of our highest volume locations in Florida, generating AUVs between $9 million and $12 million each. Additionally, these restaurants have very strong margins. Twin Peaks is also set to hit a key benchmark by the end of this month, surpassing 100 locations. We anticipate opening 18 to 20 new Twin Peaks in 2023, closing the year with approximately 115 lodges and almost 40% growth in unit count in just 2 years since that brand’s acquisition of Twin Peaks.

Our current Twin Peaks pipeline includes over 100 new stores. We see similar unit growth for 2024. Twin Peaks is the only brand where we are materially growing the number of company-owned locations in key markets as both the return on invested capital and absolute dollar profit are very high. Traditionally, we’ve opened 2 to 3 company-owned units each year, but we are striving to increase that in 2024 to 5 or 6 units per year and more in the years thereafter.

Co-branding is another key part of our strategy to help drive sales and leverage margins. We see great value in pairing similar brands in our portfolio together as a way to drive additional revenue growth through a combined menu approach. We presently have more than 230 co-branded locations, mainly consisting of our Fatburger, Buffalo’s Express or Marble Slab Creamery, Great American Cookies pairing.

During the quarter, we brought Fatburger back to Illinois with the opening of co-branded Fatburger and Buffalo’s Express in the Chicago area in partnership with A.D.T.J. Development LLC. which includes basketball stars, Anthony Davis Jr., Derrick Rose and Tim Hardaway, Jr. This opening is just the start of our growth in the state, as it is tied to a larger multiunit Illinois franchise development deal.

Similarly, brand synergies within our portfolio continue to be an important strategy for FAT Brands. In April, we unveiled a new cookie offering across all Elevation Burgers. We saw an opportunity to enhance Elevation Burger’s dessert program with the cookie dough we currently produce at our manufacturing facility in Georgia. Not only will this provide a boost to the Elevation menu, but it will also increase the productivity of our manufacturing facility.

Following the Elevation Burger cookie launch, we began rolling out cookies across many of the other burger brands in our portfolio, which should be substantially complete by the end of the summer. As you know, our Georgia-based manufacturing facility produces pretzel mix and cookie dough for several of our brands. We believe our factory business today is in its early stages of growth because it only operates at about 35% to 40% of its capacity. We began expanded utilization of the factory just about a year ago when we acquired the Nestle Toll House Café by Chip franchise business. We are still in the process of rebranding approximately 20 Nestle Toll House Café by Chips to Great American Cookies. To date, we have converted approximately 50 stores and expect to complete the remaining 20 conversions by late 2023.

Now let’s turn to FAT Brands’ second strategic pillar of growth. That’s by acquisition. When evaluating potential acquisition targets, our focus remains on strategic acquisition opportunities of brands with a proven track record of long-term sustainable and profitable operating performance. And as noted, we are focused on our high-growth brands, particularly our sports lodge category and would consider acquiring concepts with locations that can be converted into Twin Peaks. We are also looking at other categories to round out our portfolio such as salad, sandwich or coffee brands. And finally, we are looking at opportunities that would allow us to further expand our manufacturing business. Looking at our balance sheet, we have worked hard to maintain a healthy liquidity position consisting of both cash and marketable securities. Further, we have taken steps to reduce approximately $5 million in corporate G&A for 2023.

As we all navigate this challenging interest rate and inflationary environment, we have adjusted our focus to realize long-term goals that will yield significant shareholder value and execute our corporate strategy, making sure we have adequate liquidity and runway, nurturing the brands that we expect will generate significant value in the future to reduce debt and growing our EBITDA through new unit openings takes priority in this environment.

I want to address recent discussions regarding the state of our financials. FAT Brands has strong liquidity and is in compliance with all of our debt covenants. Our securitized debt, which is the only debt we have, matures in 2051. It begins to amortize a little bit each year for the next couple of years beginning later this summer. We are prepared for such amortization. We locked in our fixed interest rate in 2021 at favorable rates before the crazy increase in interest rates. And we are like many other acquirers of brands using debt and equity to make those acquisitions and then paying down that debt over time.

We are focused on getting to a cash flow positive and GAAP net income positive position in the coming quarters. But we are not unlike a number of our peers in this space that are not yet GAAP net income profitable because they are in a high-growth state. We are creating tremendous value in our brands, which we expect to realize in the future. Next, I’m proud to share in March that we officially launched a newly formed 501(c)(3) charitable organization, FAT Brands Foundation. Giving back has always been a part of the FAT Brands DNA. This foundation was created to amplify the existing charitable efforts of our company. The foundation will partner with local nonprofit organizations in areas in which FAT Brands has a presence to provide essential programs to help families and communities thrive. As our company continues to grow in size, we want to take our charitable efforts to the next level by launching a new arm that more broadly supports our employees and customers’ communities. We are excited to be officially live and to have the opportunity to become more ingrained with local nonprofits that are committed to making a positive impact in the markets where we operate. Since its launch, the foundation has already funded 5 local organizations in the following areas: children in poverty, families with special needs, food insecurity, education and theater. The foundation was seeded with a $250,000 donation from FAT Brands upon its inception and will continue to receive support from the company, our vendor partners, employees and franchise partners to further the directive and impact of the organization in the years to come.

And finally, as announced, we have also made several changes to our Board of Directors in addition to my appointment as Chairman of the Board. In March, we elected controlled company status under the applicable NASDAQ rules. Further, we expanded the Board from 7 to 10 seats and welcomed 8 new directors, all of whom bring unique valuable skill sets that will aid in furthering the success of FAT Brands as a leader in the restaurant space.

The new director appointments include several current FAT Brands’ C-suite executives; Thayer Wiederhorn, Chief Operating Officer; Taylor Wiederhorn; Chief Development Officer; Mason Wiederhorn; Chief Brand Officer; and Donald Berchtold, Chief Concept Officer. Carmen Vidal, our international legal consultant for FAT Brands is also appointed to the Board. Additionally, we appointed 3 independent directors, Mark Elenowitz, Kenneth Kepp and Tyler Child joining Lynne Collier, who remains on the Board and is now the Chair of our Audit Committee.

We expect these Board changes will save the company $1.1 million per year. I want to point out that we did not increase our directors’ fees. We simply combine the annual and committee fees into a flat rate equal to the same amount. And further, management team members who serve on the Board do not receive Board fees. Additionally, I want to thank the Baker Tilly firm for 4 years of extremely hard work and professional partnership that helped us grow the company significantly, and we will miss working with them. We expect to name and appoint new auditors for the 2023 fiscal year shortly.

I also want to thank those Board members that chose not to continue to serve on the FAT Brands Board for their dedicated service. In summary, I am confident that we have a very strong leadership team in place and a robust pipeline of growth ahead that will naturally delever our balance sheet. Our long-term strategy is to create value through the organic growth of our brands, acquire additional brands that are strategic to our portfolio makeup, realize value when appropriate, to manage any debt outstanding and increase long-term value for our stakeholders, while giving them a consistent dividend along the way. We sincerely appreciate you joining us today and for your interest in FAT Brands. And with that, I would like to hand it over to Ken to talk about our financial highlights from the quarter.

Kenneth Kuick

Thank you so much, Andy. I am extremely humbled to take on this new responsibility as co-CEO and drive forward the key goals of the company. We are very fortunate to have such a talented team of FAT Brands, and I see great opportunity ahead and building upon our positioning as one of the largest restaurant companies in the U.S.

Turning to our first quarter results. Total revenue during the first quarter increased 8.5% to $105.7 million, reflecting increased same-store sales and revenues from new restaurant openings. Costs and expenses increased to $105.3 million in the first quarter compared to $96.9 million in the year ago quarter, primarily due to increased activity from company-owned restaurants and the company’s factory, as well as professional fees related to certain litigation matters.

Included in cost and expenses, general and administrative expense increased to $28.4 million in the first quarter, growing $24.8 million in the prior year period, primarily due to increased professional fees related to pending litigation and government investigations. Cost of restaurant and factory revenues increased to $59.1 million in the first quarter of 2023 compared to $54.8 million in the prior year period, primarily due to higher company-owned restaurant and dough factory revenues.

Depreciation and amortization expense increased to $7.1 million in the first quarter from $6.6 million in the year ago quarter, primarily due to depreciation of new company-owned restaurant property and equipment. Refranchising losses in the first quarter of 2023 were $0.2 million and were comprised of $0.1 million in net gains related to the sale or closure of refranchised restaurants, partially offset by $0.3 million in restaurant operating costs, net of food sales. Advertising expense was $10.5 million in the first quarter compared to $10.3 million in the prior year period. These expenses vary in relation to advertising revenue.

Other expense for the quarter was $30 million compared to $19.7 million in the year ago quarter and was primarily comprised of interest expense on our securitizations. Our income tax provision for the quarter was $2.5 million compared to $4.5 million in the year ago quarter. Net loss for the quarter was $32.1 million or $1.95 per diluted share compared to a net loss of $23.8 million or $1.45 per diluted share in last year’s quarter. And on an as-adjusted basis, our net loss was $23.5 million or $1.43 per share compared to $18.5 million or $1.13 per diluted share revenue in last year’s quarter. Now turning to cash flows. It’s worth noting that our $32.1 million net loss for the quarter included $7.1 million of noncash depreciation and amortization, $7.7 million of nonrecurring litigation expense, $5 million of noncash interest expense, $1.1 million of noncash share-based compensation and $0.4 million of noncash lease expense and the total of these items, was $21.3 million. And with that, I’ll turn it over to Rob Rosen for a few remarks.

Robert Rosen

Thanks, Ken. Our focus will be on bolstering the firm’s liquidity, decreasing overhead and lowering corporate leverage. We’ll look to lower the corporate leverage by investing the time and CapEx necessary to both get the pipeline stores open and to grow and position several of the fastest-growing portfolio assets to be sold.

Andrew Wiederhorn

Rob, thanks. And operator, we’d like to open the line for questions at this time, if there are any.

Question-and-Answer Session


[Operator Instructions]. Your first question is from Joe Gomes from NOBLE Capital.

Joseph Gomes

So first, I just wanted to maybe get a little more color on you got the new co-CEOs, how are you kind of digging up the responsibilities between the 2?

Andrew Wiederhorn

Well, I think there’s a division between Ken’s responsibilities and Rob’s responsibility, so it’s pretty easy for these guys to tackle that. Ken, as the Chief Financial Officer is really covering those aspects of the business, investor reporting, all of the finance and accounting roles and Rob running debt capital markets is really all of the balance sheet, all the capital coming on to the balance sheet and the maturities and the cost of capital and the retiring of preferred debt over time. And so those 2 guys are working together with Thayer, who’s our Chief Operating Officer, really running the brands and Taylor, our Chief Development Officer and the rest of his team and the other guys. It’s very well divided amongst the entire team, not just Rob and Ken.

Joseph Gomes

Looking at the economy, kind of this is 2-part question here, are your franchisees seeing any slowdowns in their business? Doesn’t appear so from what you’ve said on the first quarter results. And how is demand and interest for new franchisees? Is it still — is running as hot or maybe that’s cooled down a little bit from last year?

Andrew Wiederhorn

I would say — to answer the 2-part question with 2 answers. I think same-store sales are just a little bit softer, as we roll into Q2 than they were in Q1. And I think that’s consistent across the industry, except maybe in the QSR side of things. And we’ve definitely seen a pickup in business again in the sports lodges, which we’re excited about. A lot of activity these days, of course, with all the different playoff games. And then in terms of new franchise development, it’s really on track. I don’t think that we’ll have a year like we did in 2022, again, where we sell almost 500 new stores, 460 new stores or something like that, maybe 350, it’s a big number.

And we’re hoping to get to 200 this year. We’re going to hit 100 by the end of the first half of the year. And in terms of new store openings, we’re 25% higher in new store openings than we were a year ago. So franchisees are continuing to build stores at a faster pace. They’re still buying the territory rights for new development, perhaps at a slightly slower pace than last year, but I don’t think last year is very good example as a year that we’re going to hit every time.

Joseph Gomes

Right, right, yes, that would be a little difficult to do, but excellent. You didn’t mention anything on the preferreds. Just wondering if you can give us an update on what is going on there?

Andrew Wiederhorn

Yes. It’s in our 10-K and in our 10-Q. We redeemed about $45 million of the $137 million of preferred stock that was redeemable last year. And some of that preferred stock has been permanently retired. We used our securitization facility to generate bonds. We used bonds to buy back stock and used some cash. And so we have reduced the amount of preferred outstanding that is what you’d call putable. The balance of that preferred stock remains outstanding. It earns a dividend and an extra dividend rate until the time that we retire it. But in this environment, it’s difficult to want to issue common equity given the current stock price. And so we’ve chosen to use the securitization facilities instead and hope that we’ll retire the rest of that redeemable preferred stock in the coming quarters.

Joseph Gomes

Okay. Let me — one more for me, and I’ll step aside, let someone else ask some questions here. So I was just looking at your restaurant cost as a percent of the restaurant sales, came in at about 94.4% for all of 2022, it was just a tad under 92%. Was there something different in the first quarter that hit that 94.4% or could we anticipate that number coming down in the coming quarters?

Kenneth Kuick

Joe, it’s Ken. I just want to point out in that number that you’re talking about, the cost number you’re referring to is the restaurant and factory costs. So you have to on the revenue side add the factory sales and restaurant sales. We’re expecting to continue to increase the margins on our company-owned restaurants. That will be part of Rob and Thayer and Andy [indiscernible] focused over the next several quarters.

Andrew Wiederhorn

Is a little bit — it dilutes the percentage number. It’s a little bit blended there to try to figure it out when they’re together. We’re very focused on filling up the factory. We have a large sales in process pipeline of third-party manufacturing business as well as rolling out the manufacturing of cookies and pretzels and brownies and things like that to our other brands. So that uses up capacity to generate more earnings.

And then, of course, the growth of Twin Peaks is extraordinary. And that’s really where we’ve elected to invest capital to build more company-owned stores or convert other brands into Twin Peaks. And so I think you’re going to see us be able to put a mark on the value of those assets as we roll into the back half of 2023 and into 2024 and that will be what we earmarked to reduce significant debt in the future and a very strong way to look at how our business will play out with realizing some value from a couple of assets that will leave us closer, if not 100% debt-free with a lot of free cash flow over the next 2 or 3 years.

We all thought going into 2022 after all the acquisitions we made in 2021 that we would be able to issue common equity at a good price in the markets and also refinance our debt portfolio. But of course, the market changed. And so it made it more difficult to do those things, and it made us shift our focus towards a long-term solution instead of a short-term solution to paying down our debt. And the organic growth we have that’s inherent in the portfolio where EBITDA will grow from $90-something million to $150 million, naturally deleverage this, but these additional assets and having the ability to realize value on those assets, I think, will be a telling sign in the future. Joe, thank you very much. Anyone else who has a question?


Yes. The next one is from Roger Lipton from Lipton Financial Services.

Roger Lipton

Andy, any of you can answer, is there any more room in the securitization facility? You used it, I think, at the end of last year and I think in the first quarter. Is there further room to take down funds if you like?

Andrew Wiederhorn

Rob, why don’t you address that?

Robert Rosen

Roger, there is — the amount that can be issued is based on ratios and covenants and performance of the underlying portfolios. And without getting into too much detail on which ones have the room if there is room in the portfolios to continue to issue some more what we refer to as facilities.

Andrew Wiederhorn

Roger, one way to think about it is that today, we have cash and marketable securities already on our balance sheet that we haven’t sold. So issuing more securities would just generate even more available for sale to raise cash. We already have $40 million of bonds or $43 million of bonds sitting on the balance sheet alongside of our cash available today and then issuing more, it’s a big number that’s available if we need it, as we have runway here to execute on these brands.

Roger Lipton

Okay. And have you yet been able to increase the utilization rate in the manufacturing facility? Or is that…

Andrew Wiederhorn

It’s definitely up. It’s definitely up. Because, again, we bought the Nestle Toll House brand. And then also we are rolling out cookies across all of our restaurant platforms and some brownies and pretzel items. So our goal is to get that number up in the 50s here right away, 50% utilization from 33%. And we have a lot of third-party contracting that we’re negotiating right now where we have sales in process or RFPs that we’re responding to that I think will utilize a good portion of the capacity.

The thing to think about is we want to utilize capacity for very profitable manufacturing, not just for marginal manufacturing. And so we’re trying to be thoughtful about if we’re going to take on a third-party contract or we’re going to expand into a channel, we want to make sure we’re soaking up capacity with extra margin business so that we can maximize the amount of margin that factory can generate before we look towards long-term sales of factory and some sort of a long-term supply contract.

Roger Lipton

Okay. So is it safe to project that the EBITDA from that facility will be moving up in the course of this year.

Andrew Wiederhorn

It is safe to project that. And furthermore, our goal is to try to utilize as much capacity as possible between now and the end of the year so that we’re in a position to perhaps list the factory business for sale sometime in 2024. It might be towards the second half of 2024, but we want to maximize value there, and we think it’s a great opportunity.

Roger Lipton

And the company Twin Peaks that you’re building, my assumption is that it affects — generally build-to-suit capital is available to you, you don’t need too much of your own. As well as those stores are doing, their AUV is being so high that there is capital out there from developers. So that you don’t have to use too much of your own which is…

Andrew Wiederhorn

That’s right. I mean, essentially, what we do is we use our capital to build the store, buy the land, build the store. We get some financing for that along the way, and then we might turn around and do some sort of a sale leaseback of the asset and maybe have some long-term financing in place like a lease or something for equipment on the store.

So we’re minimizing the amount of long-term capital that’s invested. And that just makes a return on invested capital very, very high and very attractive. And Joe Hummel and his team have done an excellent job of managing these stores. They have the team in place to really grow that company-owned platform. It’s the only part of our business where we’re letting that happen because of the ROI is so significant. And as we’ve talked about before, we really want to see the EBITDA in that business go from a $40 million run rate this year to a $50 million and then $60 million and so on and that will enable us to really realize the long-term value of Twin Peaks in the next 3 years or so at a very big number.

Roger Lipton

And what about the value in which there is no doubt a substantial amount in Fazoli’s or Round Table or Fatburger? I mean, presumably, those brands are worth considerable amount of money as well.

Andrew Wiederhorn

Absolutely. I mean, each one of those brands is worth a lot of money. It’s not our goal to sell off every brand that we have. It’s our goal to decrease our leverage to either — to a very manageable level or no leverage. And that’s just a function of when we see the brands ready to harvest value, which ones do we do, do we spin out one of the brands publicly, do we sell it to another private equity firm for all cash and reduce debt, which is more likely, is there are all options that are available to us or raise some cash in some sort of a partial IPO or something.

We have all those levers available. We can also always refinance, call and reissue our securitized debt like many other private equity firms and issuers do. We’re just — we’re very fortunate — in an unfortunate environment, we’re very fortunate that we issued this debt in 2021 with a 30-year fixed rate, and we thought we’d all be able to refinance it for less in 2022. That didn’t happen. We had to look further down the road towards a long-term solution. But look, refinancing those existing securitizations is certainly not off the table. It’s just — it’s more expensive to do it today.

So what you get out of it would be a negative number in terms of savings. But we’re creating so much value. It’s just sort of an annoying fact that we have to live with right now that rates have gone up as much as they have, and we can’t harvest those short-term savings, but it’s not changing the value of — inside each brand that we’re creating, we’re still opening lots of new stores and improving EBITDA or just cash flow generated by those brands. So you’re right. You can look at a number of other brands in our portfolio besides Twin Peaks and besides the factory and point to a Round Table or Fatburger or Johnny Rockets, something like that [indiscernible] is having substantial value if we wanted to do something with one brand or another. Any other questions?


No further questions at this time, sir. Please continue.

Andrew Wiederhorn

Great. Operator, thank you very much. And at this time, I’d like to complete the call and thank everyone for joining us today and wish you all a good day or good evening and good week. Take care.


Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for participating. You may all disconnect.