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Statement from FAT Brands Regarding SOX 402 Charges

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FAT Brands Inc. faces charges of violating SOX 402 for arranging loans to Andy Wiederhorn. The company denies the charges, stating they are unwarranted and unjust. Despite this, FAT Brands highlights its growth to 18 brands with $2.5 billion in global sales and 2,300 locations worldwide. The company remains focused on its operating plans and growth strategy.

Positive
  • FAT Brands has experienced remarkable growth, expanding to 18 brands with $2.5 billion in global sales and 2,300 locations worldwide.
Negative
  • FAT Brands faces charges of violating SOX 402 for arranging loans to Andy Wiederhorn, which could have legal and financial implications for the company.

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The recent indictment of FAT Brands on two charges of SOX 402, which relates to personal loans to company officers and directors, presents a significant legal challenge that could impact investor sentiment and the company's financial future. While the statement asserts the charges are 'unprecedented, unwarranted, unsubstantiated and unjust,' it is important for investors to consider the potential repercussions. Legal proceedings may lead to fines or sanctions, which could dent the company's profitability and necessitate a review of internal controls and compliance frameworks. Moreover, a prolonged legal battle could erode public trust and distract management from core business activities. Despite the impressive growth and expansion detailed by FAT Brands, the market often reacts negatively to legal uncertainties, which can affect stock performance. Investors should monitor this situation closely as it unfolds.

FAT Brands' indictment under SOX 402 could introduce a period of uncertainty for the company and its shareholders. While the company highlights its rapid growth and sizeable global sales, these regulatory issues can overshadow business achievements. Legal scrutiny could potentially impact future earnings, especially if the resolution involves substantial fines or restructuring of corporate governance. It is essential for investors to scrutinize the company's next financial disclosures for provisions or liabilities that may be recorded in relation to this case. Additionally, FAT Brands' growth strategy and operating plans could face headwinds if resources are diverted to legal defense efforts. Investors should stay attuned to updates on this situation and weigh the possible financial outcomes against the company's current valuation.

From a public relations perspective, the SOX 402 charges against FAT Brands necessitate a strategic communication approach to manage reputation risk. The company's assertion of the charges being 'unprecedented' and 'unjust' is a clear effort to align public perception with the company's defense narrative. While FAT Brands emphasizes its past cooperation with the investigation and its commitment to franchisees and investors, the public, including potential and current investors, may remain skeptical until a resolution is reached. Therefore, it is essential for investors to observe how effectively FAT Brands manages its public image during this period, as reputation can have a tangible effect on consumer behavior and, by extension, company performance in the market.

LOS ANGELES, May 10, 2024 (GLOBE NEWSWIRE) -- Today Brian Hennigan of Hueston Hennigan LLP, Counsel for FAT Brands Inc., issued the following statement:

“Today FAT Brands was informed that it has been indicted on two violations of SOX 402 for arranging approximately $2.65 million in loans to Andy Wiederhorn.

These charges are unprecedented, unwarranted, unsubstantiated, and unjust. They are based on conduct that ended over three years ago and ignore the Company’s cooperation with the investigation. 

FAT Brands will take all necessary action to defend itself, while seeking a just resolution to these charges. Since becoming a public company, FAT Brands has grown to at a remarkable pace to encompass 18 brands with $2.5 billion in global sales and 2,300 locations worldwide, benefitting franchisees and investors alike. The Company will continue executing on its operating plans and growth strategy.”

About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets and develops fast casual, casual and polished casual dining restaurant concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza®, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Smokey Bones, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Native Grill & Wings, Pretzelmaker, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit http://www.fatbrands.com.

MEDIA CONTACT:
Nathan Miller, Miller Ink
nathan@miller-ink.com
310-571-8264


FAQ

What charges is FAT Brands facing regarding SOX 402?

FAT Brands is facing charges of violating SOX 402 for arranging loans to Andy Wiederhorn.

How many brands does FAT Brands currently own?

FAT Brands currently owns 18 restaurant brands.

What is the global sales figure for FAT Brands?

FAT Brands has $2.5 billion in global sales.

How many locations does FAT Brands have worldwide?

FAT Brands has 2,300 locations worldwide.

FAT Brands Inc.

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