FAT Brands opening restaurants ‘like crazy’ as labor, supply chain stresses ease: CEO

Despite some analysts painting a dark economic outlook, one American restaurant brand is finding business success by consciously navigating inflation coupled with easing supply chain and labor pressures.

"I've never seen the community with more money to invest, to open more restaurants, despite what you might read in the business headlines about the economy," FAT Brands CEO Andy Wiederhorn said in an appearance on "Mornings with Maria" Wednesday. "They are opening like crazy."

FAT Brands -- which runs names like Fatburger, Johnny Rockets, Round Table Pizza, Twin Peaks and 13 other concepts -- is breaking ground Wednesday on its 100th franchise opening this year, breaking a company record, according to a press release.

"Customers want to be in restaurants. They're tired of staying at home," Wiederhorn told host Maria Bartiromo. "And look, it's so expensive to go to the grocery store. You can go to a restaurant for the same amount of money and enjoy the experience."

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The latest consumer price index showed inflation was up 8.2% year-over-year in September, but food prices were up even higher at 13%. With food prices continuing to spike, Wiederhorn gave franchise owners a solution to keep customers coming back despite higher menu prices.

"We've stressed to our franchisees that they have to give value. You have to give something to the customer. You can't just say, ‘Be loyal to our brand, we're raising prices,’" the CEO said. "Give them something of value, whether that's extra chicken wings or a different portion, something that makes up for it."

Admitting that raising menu prices is a "necessary evil," Wiederhorn believes inflation has made going out to eat as affordable as cooking at home.

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"If you're competing against a grocery store, we're winning that battle, right? It's so expensive to go to the grocery store, you're going to eat out more than cook at home when you can," Wiederhorn argued. "You have to raise prices, but you got to give value to the customer. And we want our franchisees to maintain the margin. They have to make money. If they make money, they build more restaurants, and that's what it's all about."

FAT Brands has also seen pressure ease around the labor market, according to Wiederhorn, who noted that hiring staff after the pandemic was "impossible," though experienced managers remain difficult to recruit.

"It's just harder to find experienced managers, and it's expensive to get them to switch from where they are," the CEO said. "They're just not waiting around unemployed. So that's a challenge."

And while previous supply chain disruptions heavily impacted food product shipments, Wiederhorn says franchise restaurants are experiencing a "headache" around equipment certification delays.

"There's also all kinds of backups in permitting in the different cities, the council and city planning departments, so those are the kinds of supply chain issues," Wiederhorn detailed. "But I think they all sort of fade away as people get caught up again from COVID, and they're back in the office or back in city hall doing those things."

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In 2021, the company spent $1 billion in an acquisition spree, purchasing brands like Nestlé Toll House Café. According to its CEO, eight restaurant brands were acquired during the pandemic with 17 others in recent years.

While FAT Brands currently operates about 2,300 restaurant locations, the company is poised for further growth, with plans to open 25 more franchises by the end of this year.

"I think there'll be the same opportunity rolling into 2023 with the economy being uncertain, could be some really good opportunities for us," Wiederhorn said. "We have 1,000 stores in our pipeline already signed up to be built by franchisees, so we'll go from 2,300 to 3,30, but we'll add to that brand portfolio."

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FOX Business’ Breck Dumas contributed to this report.