LOS ANGELES, CA – Fatburger Corporation and certain of its subsidiaries (“Fatburger” or the “Company”) has received a senior secured credit facility as well as a Debtor-In-Possession financing facility from a Los Angeles based special situations investment company. Fatburger is a fast casual restaurant operator and franchisor headquartered in Santa Monica, CA. FocalPoint Securities, LLC (“FocalPoint”) served as financial advisor to Fatburger.
Fatburger was founded in 1952 by Lovie Yancy based on a concept of serving big juicy cooked to order hamburgers using the freshest ingredients in a fun, festive atmosphere. In 2001, the Company was acquired by former basketball star Earvin “Magic” Johnson and several other investors. In 2003, Fog Cutter Capital Group, Inc. (“Fog Cutter”) began acquiring an interest in the Company, which had approximately 40 restaurants at the time. Fog Cutter acquired voting control of the Company and expanded the concept nationally and internationally. Fatburger currently operates approximately 93 Company-owned and franchise locations all over the world.
In 2007, the Company began to experience a severe shortage of financing as a result of the downturn in the economy and in the restaurant industry in particular. Many of the traditional sources of debt capital to the restaurant industry exited the market altogether. Two of the company’s subsidiaries, Fatburger Restaurants of California, Inc. and Fatburger Restaurants of Nevada, Inc., filed chapter 11 in order to restructure or reject a number of unfavorable leases and executory contracts. Fatburger Corporation and several other subsidiaries, including the franchise entity, Fatburger North America, Inc. are not involved in the bankruptcy.
Despite the downturn in the credit markets, FocalPoint was able to secure a new senior secured credit facility as well as Debtor-In-Possession financing that will enable Fatburger to continue its operations while it seeks to restructure its debt through a confirmed plan of reorganization.
“We were concerned about the lack of traditional financing available to the restaurant industry in the current environment,” said Andrew Wiederhorn, Chairman of Fatburger Corporation. “FocalPoint was able to identify a partner for us which will enable us to maintain our current California and Nevada Company owned restaurant operations while we restructure units.”
Dan Conway, a managing director at FocalPoint, added: “We look forward to continuing our relationship with the Company as it seeks additional financing to confirm its plan of reorganization, exit bankruptcy, and ultimately continue its growth strategy.”
About Fatburger
Founded in Los Angeles, California in 1952, the Fatburger restaurant chain has 93 restaurants serving big, fresh, 100 percent pure lean beef burgers custom made and grilled right in front of customers in Arizona, California, Colorado, Florida, Georgia, Michigan, Nebraska, Nevada, New Jersey, New York, Ohio, Illinois, Texas, Washington, Canada, Dubai, Hong Kong and Macao. Fatburger operates 33 company owned restaurants with franchisees operating 60 locations.
About FocalPoint
FocalPoint is an independent investment bank specializing in mergers and acquisitions, private placements (both debt and equity), financial restructurings and distressed transactions. The firm’s primary focus is on middle-market companies.
Please contact Dan Conway at 310-405-7010 with any questions about this transaction.