FAT Brands Inc. has announced that CEO and Chairman Andrew Wiederhorn will take a temporary leave of absence as part of a restructuring agreement linked to its ongoing Chapter 11 proceedings, in a move aimed at stabilising the business and unlocking fresh funding.
The decision comes as the company secures debtor-in-possession (DIP) financing, providing a critical liquidity lifeline to maintain operations while it works through bankruptcy and initiates a court-supervised sale process. As part of the agreement with creditors, Wiederhorn will step away from day-to-day management, although he will remain eligible to participate as a bidder in the company’s sale.
The restructuring arrangement also includes governance changes, including board-level adjustments and the creation of an independent committee to oversee operations during the transition. Court filings indicate that the agreement is designed to minimise disruption and protect stakeholder value while avoiding prolonged legal disputes.
Despite the leadership shift, FAT Brands’ franchise-led business model is expected to ensure continuity across its global network. The company operates more than 2,200 restaurants worldwide, spanning multiple concepts such as Fatburger, Johnny Rockets and Round Table Pizza, with the majority run by franchisees. The DIP financing will support ongoing operations, including supply chain, marketing and franchise support functions.
The company is now preparing to formally launch a sale process, which could include the divestment of all or part of its multi-brand portfolio. Industry observers expect interest from private equity firms, strategic buyers and existing stakeholders, particularly given the scale of FAT Brands’ franchised platform. Wiederhorn’s ability to bid adds an unusual dimension, allowing current leadership to potentially influence the company’s future ownership.
FAT Brands entered Chapter 11 earlier this year under the weight of significant debt, estimated at over $1 billion, alongside broader industry pressures such as rising interest rates, inflation and uneven consumer demand. The restructuring is aimed at reducing leverage and preserving long-term value across its franchise system.
The development underscores broader shifts within the global franchise sector, where asset-light models offer operational resilience, but heightened creditor scrutiny and governance expectations are increasingly shaping outcomes. As FAT Brands moves into the next phase of its restructuring, the focus will remain on sustaining franchise operations and securing a viable path forward through the sale process.
