FAT Brands to Acquire, Franchise Yalla Mediterranean
FAT Brands announced that it would acquire the seven-unit California-based brand Yalla Mediterranean.
The brand, known for traditional Mediterranean flavors on a salad, plate or in a wrap will be the seventh for FAT Brands (NASDAQ: FAT). The company has been "acquisitive" in the past year, acquiring Hurricane Grill and Wings last November, and two multi-brand acquisitions in 2018, including Buffalo's Cafe and Buffalo's Express in one and Ponderosa and Bonanza Steakhouses in the second.
"We think that healthy Mediterranean space is very popular right now, we think there is a lot of white space to franchise and growth through our system and through our franchisees," FAT Brands CEO Andy Wiederhorn told Franchise Times.
He said the sustainable, prepared-daily, diet-friendly concept checks a lot of boxes and fits in nicely with FAT Brands other concepts, which Weiderhorn says have been growing sales via traffic.
"We still are printing positive same-store sales, we're at 13 percent year-over-year without price increases, that’s because the product is good," said Weiderhorn. "I can't imagine having a product that is not so good in this market. When you look at Yalla, it fits right in."
He said while the ink dries, he's preparing the brand for franchising; penning FDDs and then plugging it into the existing FAT Brands development pipeline. He said there is some work to do but expects to move fast in 2019 to franchise the original seven locations and then into franchise growth.
"Everything will be converted to a franchise, I expect to do that in Q1," said Weiderhorn. "We have multiple operators in mind already."
He said despite the all-in speed at Yalla, he's expecting more brands and other big company moves in 2019. Starting with an updated credit facility that will push growth further and fuel the company's next acquisitions.
"We expect to increase our credit facility in the near future as I've stated on earnings calls," said Weiderhorn. "As far as goals, we are very acquisitive right now. We have several other deals in the pipeline."