FAT Brands Inc. (NASDAQ:FAT) Q1 2025 Earnings Call Transcript

FAT Brands Inc. (NASDAQ:FAT) Q1 2025 Earnings Call Transcript May 8, 2025

FAT Brands Inc. misses on earnings expectations. Reported EPS is $-2.73 EPS, expectations were $-2.4.

Operator: Greetings, and welcome to the FAT Brands Inc. First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Star zero on your telephone keypad. A reminder, this conference is being recorded. At this time, I’d like to turn the call over to Ken Kuick, FAT Brands’ CFO. Please proceed.

Ken Kuick: Good afternoon, everyone, and thank you for joining the FAT Brands earnings call today. On the call with me today is Andy Wiederhorn, our Chairman of the Board. This afternoon, we released our first quarter 2025 results. Please refer to the earnings release and earnings supplement, both of which are available in the Investors section of the company’s website at www.fatbrands.com. Each contains additional details about the first quarter, which closed on 03/30/2025. Before I begin, I must remind everyone that part of the discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. Actual results may differ materially from those indicated by these forward-looking statements due to a number of risks and uncertainties.

The company does not take to update these forward-looking statements at a later date. For a more detailed discussion of the risks that could impact future operating results and financial condition, please see today’s earnings release and recent SEC filings. During today’s call, the company will also discuss non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation nor as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are available in today’s earnings release. I’d like to turn the call over now to Andy Wiederhorn, our Chairman of the Board.

Andy Wiederhorn: Thanks, Ken. Thank you all for joining us today. I’d like to extend my sincere appreciation to our talented team members and franchise partners. Their dedication to FAT Brands has been instrumental in driving our continued progress, and I’m encouraged by what we are accomplishing together. I also want to take a moment to recognize Rob Rosen and his commitment to FAT Brands. Rob decided to transition from his co-CEO role to a consulting position at FAT Brands focused on the debt capital markets. Taylor Wiederhorn has been appointed co-CEO, serving alongside Ken Kuick. In addition to serving as Chief Development Officer for the last eight years, Taylor assumed the role of brand CEO for 15 of our concepts in 2023.

That, combined with his leadership background, makes him well-equipped to take on this role. As noted last quarter, we began 2025 by spinning off Twin Hospitality Group Inc, which is now listed separately on Nasdaq under the ticker TWMP. We distributed 5% of Twin Hospitality’s Class A stock to shareholders, a $50 million dividend, while retaining the remaining shares. This strategic move allows shareholders to invest directly in Twin Peaks’ growth, improves market transparency, and provides Twin Hospitality with access to additional capital for expansion and to reduce leverage through debt repayments. Following this significant milestone, Joe Hummel decided to transition from his position as CEO. We wish him the best as he pursues new opportunities.

We have initiated a comprehensive executive search for a new leader who will capitalize on our development pipeline of over 100 lodges. Twin Peaks’ growth trajectory remains strong. In the meantime, Ken Kuick, CFO of Twin Hospitality Group Inc., will serve as interim CEO, ensuring continuity and strategic advancement during this transition. Following the Twin Hospitality Group bond refinancing in Q4 of last year, we committed to raising between $75 million and $100 million of equity in 2025 and using 75% of that, or $75 million, to reduce outstanding debt, at which point Twin Hospitality should be cash flow positive, excluding new corporate store development. While we anticipated securing the first one-third of that amount by April, the current volatile market conditions have impacted our near-term ability to do so at a reasonable price.

Despite this temporary timing adjustment, we are confident in achieving our full annual equity target raise over the next twelve months. Additionally, per the terms of our November 2024 new Twin Hospitality indenture, we’ve temporarily paused FAT’s common dividend and started to accrue the FAT Series B preferred dividend pursuant to its terms, at least until we reduce principal on the indenture by the $25 million payment threshold. Additionally, we are now turning our attention to the refinancing of our other three securitization silos, all of which have an anticipated repayment date of July 2026. We are focused on bringing FAT, which is a high-growth business, into a cash flow positive position over the coming quarters as well as further reducing leverage.

We have reduced SG&A by over $5 million a year based upon our 2024 run rate and see further opportunities within the portfolio to reduce costs, which I’ll discuss in a few minutes. I look forward to updating you further on future calls. Like last quarter, following this call, we invite you to listen to the Twin Hospitality Group Q1 earnings call at 6 PM Eastern Time. The details are contained within their earnings release also issued this afternoon. Next, let’s review our first quarter performance, which Ken will elaborate on shortly. Our total revenue for the quarter was $142 million, reflecting a 6.5% decrease from the $152 million reported in the same period last year. System-wide sales were $571.1 million, down 1.8% compared to the previous year’s quarter.

We also achieved $11.1 million in adjusted EBITDA compared to $18.2 million in last year’s quarter. Domestic system-wide sales outperformed international for the quarter. However, we observed an encouraging rebound in our international towards the end of Q1, which gives us confidence moving forward. Across our portfolio, we finished the quarter with strong momentum as same-store sales improved across all brands from February to March. We’re excited to build on this positive trajectory as we enter Q2 and progress through the remainder of the year. Our casual dining segment delivered particularly strong results, with same-store sales increasing approximately 1.6%, driven by performance at Buffalo’s Cafe and Ponderosa and Bonanza locations.

Ken Kuick: Overall, our growth strategy is based upon three fundamental elements. We are expanding our existing brand presence organically with commitments for over 1,000 new locations already in the pipeline. We are evaluating highly strategic acquisitions that would strengthen and broaden our brand as well as delever our balance sheet, and we’re enhancing our production capabilities at our Georgia facility, particularly focusing on scaling our cookie dough and dry mix manufacturing operations. Looking at our organic growth, we’ve maintained strong momentum after successfully opening 92 units throughout 2024. We’re accelerating our expansion with a target of over 100 new locations this year. We’re also making excellent headway with 23 units open in just the first quarter, which is an approximate 37% increase from Q1 of 2024.

For Q2, we expect to open an additional 25 units, keeping us firmly on track to achieve our annual expansion goals. We are particularly encouraged by the momentum in our Twin Peaks new store development pipeline. During the first quarter, Twin Peaks opened two new lodges, including the Smoky Bones conversion in Brandon, Florida, and a new lodge in Algonquin, Illinois. Both new lodges are off to strong starts. Based on our 2025 outlook, we expect measured growth across various brands, including Roundtable Pizza, which delivered a modest yet positive 0.6% same-store sales increase in the first quarter. Our digital sales at Roundtable Pizza demonstrate particular strength, climbing 5% sequentially from Q4 to Q1 2025. The 2024 digital integration of our Great American Cookies and Marble Slab Creamery has also yielded strong results, particularly via their new app, with an increase in sales of 8% and an increase in average check size of 17.6%.

A close-up of a variety of restaurant dishes in a fast-casual setting.

Our franchise development pipeline remains robust, with signed agreements for approximately 1,000 additional locations. Based on our projections, these units could generate around $50 million in incremental annual adjusted EBITDA once operational, which would strengthen our balance sheet and reduce our leverage position. This consistent development pipeline not only demonstrates the continued appeal of our brands but also creates a valuable opportunity for our franchise partners. Along with our robust development pipeline, we’re enhancing the customer experience in our existing stores. We’ve launched a new remodeling initiative with the goal to refresh 5% of all stores in 2025, increasing to 10% in 2026. Co-branding continues to be a large part of our growth strategy.

We have successfully launched 10 co-branded and tri-branded models to date, demonstrating our commitment to innovative partnerships. In March, we celebrated the debut of our first Roundtable Pizza and Marble Slab Creamery pairing in Oakland, California. This location exemplifies our approach to seamless integration, where Marble Slab’s ice cream creates a perfect complement to Roundtable Pizza’s offering, giving guests a complete dining experience from the main course to dessert. Building on this momentum, we’re accelerating our co-branding initiatives throughout 2025. We’ve already opened a tri-branded location featuring Great American Cookies, Marble Slab Creamery, and Pretzelmaker in the Dallas area. We also opened our first co-branded Great American Cookies and Marble Slab Creamery in Ohio.

Additional co-branding plans for 2025 include several new Fatburger Buffalo’s Express and Hot Dog on a Stick combinations, as well as Fatburger and Roundtable Pizza pairings. These strategic combinations not only enhance the guest experience but also maximize operational efficiency and market presence, positioning us for continued growth. International development continues to be a growth driver as well. During the quarter, Fatburger announced a new partnership to open 30 locations across France over the next three years, including five in 2026. Also, more recently, a development agreement was signed with the same established franchise partner to open 10 Buffalo’s Cafe fast-casual locations in France, with the first three units set to open by 2026.

All in all, we have exceeded over 100 new stores sold year to date. We continue to expand into nontraditional venues, recently opening a Fatburger at Dallas Fort Worth International Airport’s American Airlines employee dining hall, the first restaurant franchise in an employee cafeteria at the airport. This strategic location represents a significant growth opportunity and could be replicated across other airports, as our burgers and fries are ideal for on-the-go dining. Our experienced partners for this location will be valuable as we scale this business model. We are also leaning into value. Fazoli’s is offering fan-favorite pasta dishes for just $3.99, plus unlimited freshly baked signature breadsticks when dining in. A family of four can eat for only $16.

At Fatburger, we brought back the much-loved Baby Fat for only $5.99. While these offers are attractive, it’s the comprehensive value we deliver that truly makes a difference and resonates with our guests. Throughout our portfolio, we remain firmly committed to providing exceptional overall value, combining premium quality food with an outstanding guest experience. We’re excited to announce that later this year, we’ll be launching a portfolio-wide guest experience program that will set new industry standards and is specifically designed to cultivate lasting brand loyalty. We continue to strengthen our balance sheet. In April, we amended our Fazoli’s securitization, resulting in improved terms that enhance our financial flexibility. The amended terms have extended both the call date and repayment date while relaxing certain covenants, providing us with greater operational flexibility for Fazoli’s.

The new agreement also permits the sale of corporate-owned stores to franchisees, allowing us to refranchise our 57 company-owned and operated Fazoli’s restaurants. Refranchising Fazoli’s, coupled with the spin-off of Twin Hospitality Group, which includes all Twin Peaks and Smoky Bones locations, will significantly reduce our corporate-owned footprint and provide additional overhead savings of approximately $2.5 million per year. If we were to act upon this refranchising opportunity, we would retain only about 33 Hot Dog on the Stick corporate locations out of our total portfolio of 2,300 locations, or 2,125 locations if Twin Peaks and Smoky Bones are excluded. These strategic moves will return us to an almost 100% franchise business model.

Now turning to our growth by acquisition strategy. During 2025, we are committed to unlocking value and reducing our leverage as the cost of capital remains high. We continue to look at highly strategic targets that could help us achieve those goals. Our Georgia production facility represents one of our key strategic advantages, generating impressive financial performance with $8.8 million in first-quarter sales and $3.1 million in adjusted EBITDA, resulting in an attractive 35% margin. This second quarter, we expect to execute on a major strategic initiative for our cookie dough manufacturing business, namely a third-party contract with a national restaurant entertainment chain. We look forward to building on this momentum and increasing our utilization beyond the current level of 40 to 45% of production capacity.

Our near-term target is reaching 60 to 70% utilization, which would substantially enhance the facility’s market value and operational efficiency. While this asset could eventually help decrease debt through strategic divestiture, our immediate focus is capitalizing on the growth runway ahead. The manufacturing operation remains in its early growth stage with significant untapped potential to drive shareholder value as we execute upon our strategy. Before concluding, I’d like to share an update on the FAT Brands Foundation. To date, the foundation has awarded 10 grants in 2025 and has received a record amount of grant requests for both the months of March and April. This speaks to the commitment of the board in driving awareness and visibility of the foundation as it looks to grow its impact across FAT Brands communities.

The foundation’s dedication to giving back to our communities is also amplified by our brand ambassador program, which was launched last year. Today, over 35% of our 800 franchisees are actively involved in the program. In conclusion, FAT Brands is laser-focused on two fronts: debt reduction and leveraging our robust pipeline of growth opportunities. The energy across our team signals strong momentum. We remain dedicated to maximizing shareholder value, and we’ll continue updating you on our progress. With that, I’d like to hand it over to Ken to discuss our financial highlights from the first quarter of 2025.

Ken Kuick: Thanks, Andy. Moving on to our first-quarter results. Total revenues were $142 million, a 6.5% decrease from $152 million in last year’s quarter. This was driven by lower same-store sales and particularly the closure of Smoky Bones locations for conversion into Twin Peaks lodges, partially offset by revenue generated by our new Twin Peaks lodges. Turning to costs and expenses. General and administrative expense increased to $33 million in the quarter from $30 million in the year-ago quarter, primarily due to increased professional fees related to pending litigation. Cost of restaurant and factory revenues decreased to $96.1 million in the quarter compared to $99.1 million in the year-ago quarter, primarily due to lower same-store sales, partially offset by wage and food cost inflation.

Advertising expense varies in relation to advertising revenues and decreased to $11.1 million in the quarter from $12.6 million in the year-ago period. Additionally, we slowed down advertising at Smoky Bones as we continue our strategy of converting locations into Twin Peaks lodges. Total other expense net, which consisted primarily of interest expense, was $36 million in the quarter, compared to $33.4 million in last year’s quarter. Net loss attributable to FAT Brands was $46 million or $2.73 per diluted share compared to a net loss of $38.3 million or $2.37 per share in the prior year quarter. And on an as-adjusted basis, our net loss attributable to FAT Brands was $38.7 million or $2.32 per diluted share compared to $32.9 million or $2.05 per diluted share in the prior year quarter.

And lastly, adjusted EBITDA for the quarter was $11.1 million compared to $18.2 million in the year-ago quarter. And with that, operator, please open the line for questions.

Q&A Session

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Operator: Thank you. It may be necessary to pick up your handset before pressing the star keys. And the first question comes from the line of Alton Stump with Loop Capital Markets. Please proceed.

Alton Stump: Thank you. Good afternoon. Thanks for taking my questions. As always, Andy and Ken. I just wanted to ask about the cookie facility. I think you mentioned, you know, Andy, you expect in the near term to go from, you know, 40, 45%, you know, that you’ve been at as far as utilization here over the last couple of quarters. So I think it’s at 60 to 70%, which is an often, assume, I guess, you know, from a dollar impact, what kind of, you know, ballpark impact could that have from a, you know, efficiency standpoint if you do get to that 60 to 75% utilization range.

Andy Wiederhorn: Our goal is to increase the, you know, at that facility from about $15 million a year to $25 million a year. And getting these contracts in place, if there’s multiple initiatives going on, that’s just one of them that do it by itself, the one that we’re going to announce shortly. But there’s a lot of momentum behind that initial program, and I think it’ll cause the other two or three to drop in place right away.

Alton Stump: Great. Thank you so much. If we get the facility up to that level, then, you know, it’s probably an asset that could generate $300 plus million in proceeds for debt reduction at, you know, at some point.

Alton Stump: Got it. Got it. Thanks for that color. And then, yeah, I just wanted to ask. I mean, you guys obviously have, you know, almost 20 different concepts. It was clearly a tough quarter for the industry-wide. Obviously, weather was certainly not helpful. There’s, of course, a lot of macro news. What’s your kind of general sense across your brands from a consumer standpoint, you know, how much value focus do you think that in general that you’re gonna have to do with the concepts over the next couple of quarters if the current consumer environment, you know, does not improve?

Andy Wiederhorn: I mean, the consumer’s apprehensive. The consumer confidence level is, you know, is mixed. It’s definitely event-driven. So, you know, we’re seeing bubbles of exuberance, and then we’re seeing people, you know, pare back in terms of their traffic. And if that’s, you know, within a brand, not just across brands. So, you know, I think this value as we talk about value and you’ve seen QSR brands in the industry sort of abandon their value play, value for us is really different. It’s what I said earlier. It’s creating, you know, great food and a great experience to justify the price because consumers are, you know, they’ve had it with pricing yet. They still want to go out and go into restaurants and, you know, take advantage of the great experience.

You just have to give them a great experience to justify what they’re paying for it. And so I think that’s gonna continue the rest of the year. I know there’s a lot of brands that are betting on the second half of the year that things are gonna all of a sudden be amazing. We’ll have to see. You know, we are trying different initiatives to drive traffic, and we’re gonna continue to do that and take advantage of, you know, the fact that we have great products. So people want to come to our brands. We just have to give them value.

Alton Stump: Got it. Great. Thank you. And then, you know, the last thing, and I’ll hop back in here, Andy. But just, you know, as far as, you know, like, just the delay with the first tranche that you are, you know, committed to raise, obviously, in the aftermath of, you know, the Twin Peaks, you know, IP. I guess, you know, how much longer do you think that would take, and is there any deadlines that sort of have to stick to when it comes to raising that money over the course of the year?

Andy Wiederhorn: Yeah. Thanks. There’s no gun to our head. The reality is the equity markets, you know, for restaurant stocks are in a lot of different industries that those shades are drawn, the window’s closed. And so we just gotta wait for it to open up. I think if we had been able to get the spin-off done in the fourth quarter of last year, we would have been able to sort of ride the Trump Euphoria wave in very early in Q1. And by the time, you know, we went out and had some on-deal roadshow meetings and confidential discussions, testing the waters types of meetings. You know, everyone loves the concept. Everyone loves what we’re doing. People are concerned about the leverage. Of course, the majority of the proceeds pay down the leverage, so they’re happy with that.

But at the end of the day, they just point to the market and the volatility and say, I gotta wait. I’m sitting on my hands until volatility calms down. And I think that, you know, we’re fortunate that there’s nothing that really happens within the debt indenture that’s, you know, of any real consequence, and so we’re just gonna ride it out. And I think we’ll, I mean, our bondholders have been extremely supportive. And as I indicated in our call earlier, we are talking about refinancing the remaining silos from the securitization just so that we’re well ahead of the July 2026 anticipated repayment date. And so, you know, we have over a year, but, hopefully, we’ll get that done, you know, sometime in Q2 or Q3 more likely. And that probably includes some modifications to the Twin Peaks deal as well just because the equity raise is taking longer.

Alton Stump: Got it. Great. No. That is very good to hear. And that’s very helpful. Thanks so much. I’ll hop back in the queue.

Andy Wiederhorn: Thank you.

Operator: The next question comes from the line of Joe Gomes with Noble Capital Markets. Please proceed.

Joe Gomes: Good afternoon. Thanks for taking my questions.

Andy Wiederhorn: Hi, Joe.

Joe Gomes: So just wanna make sure I understand this all correctly. And so if I look at kinda, you know, the three main revenue lines, you know, royalties were pretty flat over the year. The co-owned restaurant sales were down about 6.2%. And I’m assuming that’s the Smoky Bones that was closed. And then, you know, some of the same-store sales decline. And then the factory revenue was off about 7%, you know, not a big number, but just still off about 7%. I just wanna make sure that, you know, if this is if there was anything else besides just the same-store sales decline and the absence of the Smoky Bones that is driving those numbers?

Andy Wiederhorn: You are right that from a revenue and same-store sales, you have, you know, royalties that are consistent. You have the total, you know, system sales off because of the Smoky Bones. And that’s really also on the operating margin level as well where there’s just less restaurant-level margin at Smoky Bones. You’ve got some stores temporarily closed while they’re being converted. So both of those things. Now when we talk about the overall Smoky Bones portfolio, you know, we still think about half the locations will get converted into Twin Peaks as quick as we can. And within those 30 locations, because there’s 60 in total, about 10 of them will be corporate. We’ve converted two already. We have another one under construction now and a couple more to do over the next twelve months.

Then there’s about 10 that are clearly franchise markets, and then there’s 10 that are in between. They’ll either be a franchise or they’ll be corporate. We’ll do one or the other. And then there’s a bunch that don’t qualify as a conversion either because there’s a Twin Peaks, you know, too close already or there’s some landlord restriction where it doesn’t make it feasible. So in those cases, that remaining 30, about 10 of those restaurants will close. Their leases are running out. They’re old, there’s nothing to do with them. And then there’s about 20 that will stay Smoky Bones and continue on. And so a couple of those we’ve closed because they can’t they’re not gonna be converted, and then we’ve got the ones that are closed that are in the middle of the conversion process.

That’s why the total sales decline looks a little bit more severe. It’s just, you know, we took all of Smoky Bones and recorded all of those sales for the last eighteen months, but now we’re closing some of the ones that are destined to be closed anyway, which is again, about nine of them, I think.

Joe Gomes: Okay. Great. Thanks for that. And I don’t know if you can, you know, kinda give us a ballpark here. You know, if you were to refranchise all of Fazoli’s, what kind of value does that bring in to the parent FAT Brands?

Andy Wiederhorn: Well, I think the proceeds from any refranchising will go to pay down debt. The dollar value that we, you know, achieve for that is probably somewhere in a four to six times multiple range for those stores. And, you know, you’re gonna see something hopefully in the $20 million to $25 million range. And we’ll see how that goes in, you know, in this environment. But the other point to that is we, you know, we’ll continue to get a royalty instead of profits from the stores, and it’ll save 2.5 to 3.5 million of overhead.

Joe Gomes: Okay. And then, pardon me. You know, one of the things that, you know, we had hoped to see here was to see the litigation expenses moderate. It looks like they, you know, they kinda really went up in the quarter. You know, was there anything that you can provide us the insight as to what was driving the increase?

Andy Wiederhorn: I think that we’re gonna see the end to a lot of litigation expense here in Q2, all of it, you know, coming to an end. And, you know, look forward to talking more about that when we can.

Joe Gomes: Okay. That would be great. And then just last for me. I don’t know if you can provide us any kind of, you know, I know the same-store sales were down in the first quarter, but, you know, so far here in the second quarter, I don’t know if you could talk about, you know, what traffic patterns are looking like or average checks are looking like across the franchises.

Andy Wiederhorn: Yeah. I mean, you are seeing differences by segment in terms of, like, burgers versus wings versus snacks. We’re seeing very modest decline in sales and traffic for the cookies and ice cream and pretzels and stuff like that. You’re seeing it in more standard, you know, industry-level declines for burgers and some of the wings brands, but you’re also seeing, you know, pizza do pretty well. And so we’re pleased to see how well pizza’s held up and continuing. I mean, it’s for most of the time, either flat or slightly positive or slightly negative, but it’s done really well. As well as the snacks.

Joe Gomes: Okay. Great. Thanks. I’ll get back in queue.

Andy Wiederhorn: Thank you, Joe.

Operator: The next question comes from the line of Roger Lipton with Lipton Financial Services. Please proceed.

Roger Lipton: Yes. Hi, Andy. Hi, Ken. Thanks for taking my question. Most of the items I wanted to touch on have been referred to already, but I wanted to ask you, can you give us an estimate of the year-to-year Smoky Bones negative impact in the quarter? Trying to reconcile the decline in year-to-year adjusted EBITDA. My suspicion is that Smoky Bones did more poorly this year than last. Is there any estimate you can provide?

Andy Wiederhorn: Yeah. I mean, it’s a couple million dollars, you know, a couple million dollars a quarter. It’s a lot.

Roger Lipton: Right. Okay. I mean, you have depreciation. You have actual operating decline, so you have both of those things to, you know, run through whichever you’re looking at. And so the faster we can convert the stores we’re gonna convert, the better. And, you know, we’re very focused on that.

Roger Lipton: Right. Yeah. No doubt. When you have a we it just in the overall scheme of things, when you have rates remaining as high as they are and you have construction costs up as much as they are, and then you have tariffs that you’re importing equipment that might be affected by, you know, by tariffs and what have you. You just end up having development slow down a little bit. It’s not going away, but it slows down a little bit. And so, you know, your franchisees are your partners. You want them to build new stores at an efficient price and program, you know, either apprehensive, they’re, you know, dragging their feet a little bit to make sure they could get a better price on this or a better price on that or, you know?

And then some regions, you’ve got, you know, construction where it’s hard to find the right contractor that’s available because he’s busy on something else. And, you know, just all that stuff’s going on, and I think it’s making new store development just go a little bit slower than we would like. But it’s understandable. And it’s not that it’s not gonna happen. It’s just taking a little longer.

Roger Lipton: Right. Understood. And can you have any idea how long it’s gonna take to find a new full-time CEO to take the place of Joe Hummel? How is that going?

Andy Wiederhorn: Yeah. The executive search is going very well. We have a number of excellent candidates, and I don’t think it’ll take very long. Certainly within this quarter.

Roger Lipton: Okay. Oh, that’ll be productive. In the supplemental material, you talk about one of the one you show us a of your priorities. The $10 million of additional EBITDA adjusted EBITDA from new stores, and $5 million from the factory. What kind of time frame are you thinking about in terms of that incremental $15 million of adjusted EBITDA? A year two years? I mean, what you don’t you don’t specify the timetable.

Ken Kuick: Well, yeah, there are I think over the next couple of years is more than reasonable for both of those things. Yeah. We have because we have so many new stores opening, and we have this incremental growth at the factory, you know, over the next twenty-four months for sure, that’ll show up.

Roger Lipton: Okay. Alright. That’s it. That’s helpful. Thanks very much.

Ken Kuick: You bet. Thank you.

Operator: Thank you. This concludes the question and answer session. And I would like to turn the call back over to Andy Wiederhorn for closing remarks.

Andy Wiederhorn: Great. Thank you, everyone. I’d love to direct your attention to the Twin Peaks earnings call that is going on as we speak. Just started a couple of minutes ago. And that contact information is in the release for Twin Peaks. Operator, this concludes today’s call.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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