One of Los Angeles’s most iconic burger stands just took a huge step towards expansion today. Fatburger’s parent company, Fat Brands, just qualified for an initial public offering. First reported by LA Weekly, Fat Brands CEO Andy Wiederhorn shared why the company is raising capital: “We decided to access the public capital market rather than some sort of a private equity deal or using a tremendous amount of debt.”
In addition, Fat Brands operates Buffalo Cafe and Buffalo’s World Famous Wings, and the company’s prospectus outlines a move to acquiring more, “scalable, international, fast casual, franchises.” Fat Brands franchises operate in 181 locations, eight states, and 18 countries. The plan is to develop 300 stores after the IPO closes on October 20, 2017.
Lovie Yancy and Charles Simple opened the first stand, called Mr. Fatburger, on the corner of Western near Jefferson back in 1947. In 1952, the couple broke up and changed the name to Fatburger. While serving a mostly African-American crowd, by an African-American owner, the Beverly Hills opening in 1973 changed the game. By the early 1980s, Fatburger became a franchise.
The 1980s saw Fatburger through numerous ownership changes, from the owner of Island records, to Magic Johnson, Janet Jackson, and even David Spade. Wiederhorn’s Fog Cutter Capital was the most recent owner, purchasing the brand from Magic Johnson’s group when it had 40 locations.
Fatburger filed for bankruptcy protection in 2009, a result of the recession. After selling off a number of locations, international expansion helped save the brand, with the majority of new franchises sold outside of the United States.
According to LA Weekly, Fat Brands will offer two million shares from investors from today until October 13, at $12 dollars per share.