Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to the FAT Brands Inc. Fourth Quarter and Fiscal 2021 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Please note that this conference is being recorded today, March 21, 2022.

On the call today from FAT Brands are President and Chief Executive Officer, Andy Wiederhorn; and Chief Financial Officer, Ken Kuick. By now, everyone should have access to the earnings release, which can be found on our investor relations website at ir.fatbrands.com in the press release section.

Before we begin, I need to remind everyone that part of our 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 undertake 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 press release and our current SEC filings. During today's call, the company may discuss non-GAAP financial measures, which it believes can be useful in evaluating its 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 now like to turn the conference over to Andy Wiederhorn, President and Chief Executive Officer.

Please go ahead..

Thank you, operator. Good afternoon everyone and thank you all for joining us on the call today. I am hopeful that everyone is continuing to stay safe and healthy as well. This afternoon, we made our fourth quarter and fiscal 2021 financial results publicly available.

Please refer to the earnings release and our earnings supplement, both of which are available in the investors section of our website at www.fatbrands.com. Each contain additional details about the fourth quarter, which closed on December 26.

I would like to start out today by thanking our team members as 2021 marked an incredible year as we executed on the two pillars of growth strategy, which include acquisitions and organic growth.

FAT Brands is truly unique as we have a scalable platform that affords us the opportunity to synergistically incorporate new concepts with minimal incremental corporate overhead costs.

We also have a long runway for organic growth with more than 850 new locations in our pipeline, providing us with a potential 33% unit growth and 50% EBITDA growth over the next few years.

Today, I'm particularly excited to talk to you about our recent acquisitions and resulting synergies, M&A and capital market strategy, organic growth and continued strong brand performance.

And as you know, we have the restaurant brands organized into five different categories, namely our QSR brands, which include Round Table Pizza and Fazoli's for drive-through and delivery, and QSR also includes the snack brands such as Marble Slab Creamery, Great American Cookies, Pretzelmaker and Hot Dog on a Stick.

Then there are our fast casual brands, the burger brands such as Fatburger, Johnny Rockets and Elevation Burger, plus Buffalo's Express and Yalla Mediterranean. Next are our casual dining brands, Hurricane Grill & Wings, Native Grill & Wings, Buffalo's Cafe and Ponderosa and Bonanza Steakhouses.

Finally, our polished casual dining, otherwise known as sports bars category, hosting Twin Peaks sports lodges. The fifth category is our manufacturing business.

It came with Global Franchise Group, manufactures cookie, dough and pretzel mix for our brands, as well as conducts distribution services for other products used in those same restaurant brands operations.

In the fourth quarter, we were encouraged that our franchise partners and company-owned restaurants continue to report improving sales and in many instances, sales are equal to or above pre-pandemic levels, indicating the strength of our brands, accompanied by a return to normalcy within the industry.

Our strong performance reflects the hard work and dedication of our franchise partners and employees. While the emergence of Omicron created modest headwinds late in the fourth quarter, I'm pleased to report that our portfolio of brands performed well, posting system-wide sales growth.

Our legacy FAT Brands portfolio of brands owned for all of 2021, like Fatburger, Johnny Rockets, Hurricane Grill & Wings, et cetera, saw an increase of 5.6% over the fourth quarter of 2019 and 12.4% versus Q4 2020.

If we included the acquired brands in that calculation essentially showing how our total portfolio is doing, our increase in same-store sales over 2019 for Q4 will be 8.5% and over 2020 for Q4 would be 21.4%.

For the newly acquired brands, we saw outstanding same-store sales increases in the fourth quarter of 2021 compared to the fourth quarter of 2019 and the 2020 prior year quarter as follows. And this will all be posted in our earnings supplement on our website, so you don't need to write this down.

Johnny Rockets saw a 7.4% decline over 2019, but a 52.5% increase over 2020. Global Franchise Group saw a 10.6% increase over 2019 and a 16.1% increase over 2020. Twin Peaks sports lodges saw a 15.8% increase over 2019 and a 30.4% increase over 2020. Fazoli's saw a 25.6% increase over 2019 and 15.7% over 2020.

And finally, Native Grill & Wings saw 16.5% over 2019 and 20.7% over 2020. Restaurants across the globe continue to reopen that were temporarily closed as a result of COVID-19.

As of the end of the fourth quarter of 2021, 23 locations across the system, eight domestic and 15 international, excluding the recently acquired concepts, remained temporarily closed due to COVID-19 compared to 52 units at the end of the third quarter. Given the progress in reopenings, we expect to see continued top line revenue improvement in 2022.

We are also very encouraged that despite the reopening of dining rooms, delivery sales are showing resilience facilitated by the rollout of OLO and Captain, formerly known as Hunger, both of which are online ordering providers.

And also Chowly, which is a third-party online POS system aggregator, integrating orders into our POS systems across our portfolio. Turning now to our organic growth strategy. I am encouraged that both new construction and franchise sales are stronger than we've seen in many years, if not ever.

Our franchisees opened 30 new locations in the fourth quarter and a total of 115 locations for the full year 2021. Our current development pipeline consists of approximately 850 locations and those are committed and have mostly been paid for in full by our franchise partners, in other words, already sold, not to be sold.

Most notably, we have a pipeline of more than 470 units between Fatburger, Johnny Rockets, Buffalo's Express and Elevation Burger, plus 157 new locations for Global Franchise Group, that's Round Table Pizza, Great American Cookie, Marble Slab Ice Creamery, Pretzelmaker and Hot Dog on a Stick.

Also 144 sports lodges for Twin Peaks and 114 drive-through locations for Fazoli's. We see strong demand from our franchise partners of recently acquired concepts to develop other brands in the FAT portfolio and vice versa.

We believe that our organic growth opportunity represents $50 million of potential incremental EBITDA growth, and as I previously mentioned 33% unit growth.

Further, our factory today sits at approximately 30% capacity, namely running one shift a day rather than potentially three, and thus has significant wide space to grow the manufacturing of additional items for our entire portfolio of brands, as well as third-party manufacturing.

Equally important to our organic growth strategy is our acquisition strategy, which provides growth for our platform, fueled by the identification and addition of new restaurant concepts.

We have developed a robust management systems platform that supports the expansion of our existing brands, while enabling the accretive acquisition and efficient integration of additional restaurant concepts.

We have a disciplined and selective approach to evaluate potential targets with a focus on franchise brands with a proven track record of long-term sustainable and profitable operating performance.

Looking forward, we plan to fund our future acquisitions with a combination of cash on hand, proceeds from securitization vehicles and potentially tapping the equity capital markets. We are also focused on refinancing our debt facilities over the next year and lowering our effective cost of capital.

I want to highlight our two most recent acquisitions, Twin Peaks and Fazoli's, which both closed in the fourth quarter. To date, we are very pleased with the assimilation of both brands, and we are already experiencing significant synergies given our existing infrastructure and purchasing power.

As a reminder, on October 1, 2021, we completed the $300 million acquisition of Twin Peaks, which now operates 89 locations across 25 states, further diversifying our restaurant portfolio into polished casual dining, essentially sports bars.

We continue to look to identify brands that complement our current portfolio while delivering high AUVs and appealing growth pipelines. Twin Peaks checks all the boxes with industry leading new store AUVs in the range of $5 million to $6.5 million going as high as $12 million at some locations.

I believe we can grow this brand globally at a rapid pace, achieving a 400-unit plus platform with projected, the acquisition of Twin Peaks to add approximately $30 million in post COVID-19 normalized EBITDA in 2022.

Twin Peaks has achieved critically acclaimed ratings by both Navtrack and Black Box Intelligence over the last few years as well as having a rockstar like management team led by Joe Hummel.

On December 15, 2021, we completed the acquisition of Fazoli's, presently a 216 store brand known for its freshly prepared pasta, Submarinos sandwiches and unlimited signature breadsticks from Sentinel Capital Partners for $130 million. This transaction was funded with cash from the issuance of new notes from our securitization facilities.

This transaction checked our boxes in being a high growth brand with numerous identifiable synergies. The brand's recent performance has been outstanding and we look forward to the added royalty from successful execution on the new unit opening plan.

The brand was formally led for 13 years by Carl Howard, who recently retired and is now in hands of his former right hand and current Fazoli's President Doug Bostick, a 23-year Fazoli's veteran. As we mentioned on our third quarter call, we expect the normalized EBITDA contribution from Fazoli's to be approximately $14.5 million in 2022.

More specifically on the synergies, we see significant opportunities given our enormous purchasing power of more than $600 million per year in food, beverage and paper, as well as cross-selling opportunities between our now 17 brand portfolio.

I'd like to take a moment and address the pending government investigations and pending or threatened litigation. Being a public company and a public figure attracts its share of visibility.

As previously disclosed, the company's directors were named as defendants in the shareholder derivative action last summer brought by the same shareholder that had been a part of prior lawsuits against the company after the company's IPO in 2017.

None of those lawsuits prevailed as a court's denied certification, yet the company spent considerable money defending itself in resolving matters.

The most recent derivative suit is based upon the merger of Fog Cutter Capital Group into FAT Brands, a transaction is transformative for FAT Brands and led to its growth by more than 500% since the merger at the end of 2020.

It's important to note that this derivative action case does not assert claims against FAT Brands, but seeks recovery on its behalf, meaning any monetary settlement goes to FAT Brands, not paid by FAT Brands. Given my personal history, it does not surprise me that the government will look into allegations also raised in the derivative complaint.

And as previously disclosed, the government is now formally seeking documents concerning these matters from the company and me. The government's affidavit should not have been made public when it was a subject of the sealed court order.

Nonetheless, the United States Attorney's Office has indicated that the company is not presently a target of the investigation and that the investigation primarily focuses on me and my family.

The LA Times article that published characterizations of the government's position has many factual errors and conflates the different entities and my family as if they were won. I categorically deny the allegations raised in the L.A.

Times article and look forward to the opportunity for our legal team to demonstrate that all transactions were properly documented, reviewed, approved and disclosed and that multiple independent professionals were involved including the Boards of both Fog Cutter and FAT Brands, outside counsel, outside auditors and my and FAT Brands' tax adviser.

Our business is selling burgers, shakes and fries, pizza and meatballs, cookies and ice cream, steaks and chicken wings and 29-degree cold beer to our customers. They are coming into our restaurants more than ever and spending more than ever before. I look forward to being able to put these matters behind us.

We have a very strong senior management team made up of 18 members of our 250 plus corporate team, in addition to an active experienced and independent Board of Directors. While these legal matters are certainly a distraction personally, our team is focused on running our business and integrating the newly acquired brands into the FAT family brands.

Turning to the acquisition front. We are still in the early innings. This is an exciting time for FAT Brands and we remain active in evaluating additional accretive acquisition candidates to augment our existing brands. While we spent almost $1 billion in the past year, I don't see that scale of acquisitions happening this year.

We are now at a size and scale, but we do not need to acquire additional brands. We already have so many great ones with so much organic growth already committed and paid for. That doesn't mean that we won't make some acquisitions.

In fact, we're considering some presently, but our focus has to be this year on digesting what we already acquired realizing the synergies. Additionally, as previously mentioned, there are significant cross-selling opportunities amongst the franchise community within our 17 brand portfolio.

The fourth quarter marked yet another successful quarter for FAT Brands, and it wouldn't be possible without the dedication and hard work of our team members, our franchise partners and their employees. I'm very proud and appreciate that our team members continued to deliver strong results during these unique times.

With that, I'd like to turn things over to Ken to talk about our financial highlights from the quarter..

Thank you, Andy. I'll walk through our capital structure and then discuss the financial highlights of the fourth quarter and give some highlights into our expectations for normalized performance.

As mentioned on last quarter's earnings call, in connection with the acquisition of Twin Peaks in the fourth quarter we issued $250 million of new notes comprised of three tranches with a weighted average interest rate of 6.8% and 2.8 million shares of Series B cumulative preferred stock.

In connection with the acquisition of Fazoli's and Native Grill & Wings in the fourth quarter, we issued $193.8 million of new notes comprised of three tranches and with a weighted average interest rate of 6.7%. This brings our total securitization facilities to $938.2 million with a weighted average stated interest rate of 6.98%.

Future issuances of our Series B cumulative preferred stock and our common stock are available to us, which would provide us with additional flexibility to fund potential acquisitions, further reduce our cost of capital and drive shareholder value. Turning to our financial highlights.

Total revenue during the fourth quarter increased 1,042% to $74.2 million, reflecting revenue from Global Franchise Group acquired during the third quarter and revenue from Twin Peaks, Fazoli's and Native Grill & Wings acquired during the fourth quarter of 2021.

Revenues also benefited from 12.4% positive same-store sales growth and 87 new store opening. Costs and expenses increased to $77 million in the fourth quarter compared to $15 million in the year ago period.

New costs and expenses in 2021 include $36.9 million of company-owned restaurant and factory operating costs related to the acquisitions of GFG, Twin Peaks and Fazoli's during 2021. Additionally, these acquisitions contributed to higher G&A expense during the year.

And finally, advertising expense increased $7.1 million, reflecting advertising expenses from GFG and Twin Peaks and an increase in customer activity as the COVID recovery continues. Other expense was $17.1 million in the fourth quarter, primarily comprised of interest expense.

GAAP net loss for the quarter was $19.6 million or $1.38 per diluted share compared to a net loss of $7.7 million or $0.64 per diluted share in the prior year period.

We also report our net loss on an as adjusted basis, which excludes the after tax impact of impairments, refranchising activities, acquisition costs and losses on extinguishment of debt. On an as adjusted basis, our net loss was $16.5 million or $1.16 per share compared to $5.7 million or $0.48 per share in the prior year period.

Lastly, I'll provide some color regarding our revenue run rate and where we expect 2022 will be using 2019 as a guideline for pre-COVID performance.

Based on the 2021 performance of our portfolio and including the performance of GFG, Twin Peaks, Fazoli's and Native Grill & Wings, we anticipate a normalized total annual revenue run rate of approximately $400 million. And with that, I'll turn the call back over to Andy to take some questions..

Thanks Ken.

Operator, do we have any questions?.

[Operator Instructions] Our first question today is coming from Joe Gomes from Noble Capital. Your line is now live..

Good afternoon, Andy. Congratulations on a transformative year..

Thank you, Joe..

So, point -- a question right here, clarification. You were talking about the Q4 2021 same-store sales by concept. And I thought you said Twin Peaks was at 30.4% and 15.8%, and Fazoli's 15.7% and 25.6%. Is that correct? Just because I'm looking at the slide, the presentation deck, and I thought that might have been the numbers switched..

So, I believe I'm describing it here that Twin Peaks was 15.8% over 2019 and 30.4% over 2020.

Does that sound right?.

Yes. That's not what's in the slide deck..

Okay. We'll go check with you and make sure the slide is accurate, whichever one it is. And Fazoli's, again, I see 25.6% over 2019 and 15.7% over 2020, but maybe they're backwards..

Okay. Perfect. If you could check that, that would be great. Just as kind of looking at a lot of the stuff you talked about, which was great.

Maybe you could talk a little bit, first on supply chain and inflation, and how you see that impacting the company, especially here I guess, what you can give us for the first quarter as we saw -- we've seen gas prices spike here, if you're seeing any issues or in terms of the inflation or anything on the supply chain?.

So, we're definitely seeing inflation like everyone else in the 5%, 6%, 7% range. We've encouraged our franchise partners to take price. We are taking price at our company-owned stores. There's been some margin compression in Q1. Of course, we don't have that many company-owned stores, just about 125 out of 2,300 restaurants today.

But it's important that the franchise partners and corporate take price. You also, I think, can't be naive about it and we need to make sure we're delivering value to the customers if we're taking price.

So that's going to be a big focus of ours in the coming months and quarters that if we're taking price for inflation to maintain our margin, we've got to make sure there's value propositions for customers so that they can justify paying that higher price.

You just can't say that everybody else is raising the prices, so we should raise our prices also and customers should expect to pay it. You need to give them some value and that's something that's important that we're aware of and focused on.

We are seeing also inflation and affecting supply chain in the usual ways, which is the availability of certain items, but really the availability of equipment for new store openings.

You've seen a little bit of a delay like refrigeration equipment, things like that, that have slowed down new store openings by a month or two, but nothing that's dramatic. It's just going to push it off a month or two.

So, we're pressing as hard as we can to get what we think will be 120 to 125 new stores open this year across our different brands and trying to find creative strategies to make sure that the supply chain is not holding up those openings and pushing them into 2023.

We just have this gigantic pipeline of new stores to open as fast as we can, and very active 2022 and 2023 already..

Okay. Thanks for that. Pardon me. And you do mention about some of the buying power now you guys -- well, I think you said $600 million. I understand how that helps the franchisees.

Maybe does it really provide any benefit to FAT Brands itself outside of your helping your franchisees become more profitable?.

Well, sure. The buying power will save our franchisees a couple of hundred basis points in price, which is amazing. Now in a rising price environment, their price may only go up by 200 basis points less than it would otherwise go up, so they may not quite see it as a decline in price versus an increase. It's just going to be a smaller increase.

So, we're definitely getting the benefit of our purchasing power in terms of the muscle for being part of the FAT Brands system..

Okay. In the manufacturing facility, you talked about that a couple of times in the past, running at one shift.

What has to happen here in your view in order to kind of get that up maybe from one shift to two shifts and what kind of timing are you looking to do that?.

Yeah. We have some activities going on presently that we're evaluating that would increase our manufacturing business.

And I think that you'll see a material movement in that during the course of 2022, but it's definitely a very much a front burner type of agenda item that we want to achieve this year is to really grow that factory business and so has a big focus on it on our end..

Okay. And then, Ken, thanks for giving us kind of the run rate normalize for 2022.

Could you do the same in terms of what you think kind of like an adjusted EBITDA margin could be?.

Yeah. Let me -- yeah, I mean, on an adjusted EBITDA basis, I think Andy mentioned in the comments, we're looking at somewhere in the $90 million to $95 million run rate adjusted EBITDA..

Okay. Great. And one last one and then I'll get back in queue. I don't think so, Andy, but maybe you could just touch briefly, I don't know if what's happening over in Russia and Ukraine, has any real impact.

I know you've seen the stories of some of the other major -- I think it was McDonald's and Burger King, where the local franchisees are refusing to shut down.

I don't think you guys have any stores in those areas, but maybe you could just clarify if you're seeing any impact from that?.

Yeah. I mean, we're not. We're very stable in that sense. We haven't any exposure there. And I think we're just fortunate in that regard. But look, the franchisees around the world are feeling the inflationary effects for sure of all that.

And as I said, look at the franchise or if royalties go up because prices go up, there's actually -- it's an increase in revenue. But what's critical is that you don't have a decline in traffic. And we certainly don't want to see a 1% increase in revenue and a 1% decline in traffic. So, it's very important that we focus on that. Very important.

I'm looking at -- just to answer your prior question about the slide deck versus the percentages that I referenced, what I read off was accurate completely, the slide deck has Twin Peaks and Fazoli's numbers reversed.

In other words, the column that says Twin Peaks and Fazoli's column, column says, Fazoli's and Twin Peaks, we just need to switch those logos around. We'll repost that in a few minutes..

Okay. Great. Thanks Andy. Appreciate the time..

Thank you..

Thank you. Next question today is coming from Gregory Fortunov [ph], Private Investor. Your line is now live..

He, Andy.

How are you?.

Hey, good. Thanks.

Greg, how are you?.

I am good. Thanks. Andy, so you're pretty far along in the first quarter, probably like 90% done.

Can you give us an idea of what that's looking like?.

Yeah. Q1 has been very strong. Just again, a ton of new franchise sales, restaurant sales are comping very positively. Again, business is really solid. We're not going to see the expenses that we saw in the fourth quarter, whether they were bonus or compensation expenses or financing expenses or acquisition expenses.

So, a lot of the noise is going to go away. And so, I think Q1 will be much more in line with trying to get to that $90 million to $95 million run rate. I don't think we'll be there yet.

But we have some synergies that we will realize over the coming couple of quarters like getting rid of some office leases, some redundancy and things like that we've already put in place for certain executives that we have to just run out those costs. But we're really making huge leaps forward. And the top line revenues just continue to impress us.

And like I said, in some of the brands, it's just -- it's off the charts growth and off the charts in terms of traffic. And so, I feel really good about the business right now. We are certainly focused on it.

It's kind of a relief to be focused on executing at the business level on all of our brands and not be distracted with new acquisitions right now, and our team is very focused on budgets and on synergies and on cost savings and even the refinancing that you talked about..

Well, that's good, not just good to put your eye back on the ball. Andy, so, the way that it sounds like the ramp for EBITDA will be sort of -- it will just ramp through the year to get to that $90 million, $95 million number.

Is that the basic idea?.

That's right. That's right. We will ramp pretty quickly, but that's right. We will ramp up here. Q1 will be a significant increase over Q4 and so on.

Those synergies just kick in and also as we add 120 new stores this year, I think we have 20 of them opened -- 19 or 20 opened so far through March, but we have just a very, very big backlog on schedule to open going throughout the year and then a very strong pipeline for next year.

So, we're growing significantly every month by new unit count across most of the brands. And it's not every single brand that has hockey stick growth, but we've got five or six of them that really do. And by the numbers I read off about the pipeline -- it's just -- there's just more and more demand for those brands right now..

Okay. Andy, you've mentioned the $90 million, $95 million EBITDA number of times even last year. So, I'm going to assume that you're fairly confident in that.

And I don't know if this is for you or Ken, but assuming those numbers, is there any risk to either the company dividend and/or the preferred dividend? I mean, the preferred is trading as if it's questionable..

The dividends are safe and will continue, and the preferred is straight at a crazy price compared to its redemption value..

Okay. Just two more quick ones. You talked about refinancing last quarter. You talked about it a little bit this quarter.

Can you just dig into your confidence level, what that will do for us? If you do got to refinance what you're hearing in the market as far as maybe what the rates of like or any color you can give us?.

Yeah. So, I mean, there's a bunch of options in terms of refinancing. I mean, this debt is 30-year debt, it's fixed rate. It doesn't amortize heavily for another four plus years. It amortizes a little bit starting in 1.5 years. So, we've got a lot of runway here to manage the debt.

But we want to call and reissue it either on a rated basis or just at a lower interest rate that's not reflective of basically paying for acquisition financing, but that's more reflective of paying for long-term financing. And there's a bunch of strategies to do that. It doesn't just have to be rated, but rating is one way to get that done.

So, we are actively exploring all of those strategies now. That's really a Q3 and Q4 activity more than anything just because the debt was issued beginning last April and then in July and then in October and December. So, a lot of that debt has one year, no calls or premiums, if we call it early.

But we're actively working on it now so that -- look, we can save a couple of hundred basis points. That's another $20 plus million in free cash flow that's free. So, it's very important that we try to save 200 to 300 basis points there, and we're all about it. You just can't do it too fast because we're not allowed to yet..

Okay. All right. Andy, thanks so much. Keep up with good work..

Thank you, Greg..

Andy, one more question maybe for you or Ken. What's the cash on the balance sheet now, I didn't see the balance sheet..

The year-end cash position, I think, is around $55 million. And that's our December 31 number, and that's the only public number..

Okay. Great. Thank you. Thanks, guys..

Thank you, Greg. Next question, operator..

Thank you. The next question is coming from Roger Lipton from Lipton Financial Services. Your line is now live..

Yes. Hi, Andy..

Hi, Roger..

A lot of my questions have been answered. But just to go back to the manufacturing facility for a second.

What's the lowest hanging fruit there in terms of adding to the production? What kind of products?.

Well, so there's distributing cookies throughout our brands, for example. Right now, some of our other brands like Round Table Pizza have cookies in it.

Fazoli's sells a ton of cookies and they're buying the cookie dough from a third-party and making it in the restaurant or having it pre-made they could buy cookie dough from the factory across 200 units with another 100 units coming online that would add significant cookie production there.

We could do cookies in our burger brands, which we've wanted to do deserve product for some time. That's another 700 restaurants. So, there's a bunch of opportunities to really grow the cookie business internally organically. And even at Twin Peaks, if we wanted to do something similar to the DJ's dessert items.

And so there's a bunch of things to pursue there. But also, I think that there are incremental cookie businesses that we can add to our portfolio as bolt-on acquisitions where will not only get the franchise royalty revenue, but we'll get the manufacturing revenue.

And the way our factory works, we sell cookie dough to our franchisees and they are able to buy it basically 20% lower cost than they would pay out in the marketplace. So, they're saying 20%. So, they love that. And we're still making a nice profit on that cookie dough.

So, everyone wins there and I think that's an opportunity to keep growing that business..

And the pipeline, of course, is very impressive.

Can you give us a rough idea of what makes up that -- what are the largest contributors for the pipeline?.

Yeah. Like I think I ….

… to this year's openings, 100, 120 stores.

What will be a rough makeup of the 100 to 120 stores this year?.

Yeah. So, you'll see -- I mean, it's spread out amongst. Twin Peaks has 20 or 30 units that will open. Fazoli's has 20 units that will open. The burger brands have just a ton of units on Fatburger, Buffalo's Express, Johnny Rockets, Elevation Burger, there's a number of those opening, several dozen of them each.

And then even in the Global Franchise Group portfolio where you have 157 locations in the pipeline, you've got new Round Table's opening every day, new cookies and ice cream and pretzel brands opening.

So, it's fairly evenly spread out, but it is very strong and literally a supply chain, the only thing holding it back where we would be able to do more right now. There's real estate out there. The franchisees have plenty of demand to open stores. They just got to -- they have got to -- just get that the leases signed to get their equipment ordered..

Okay. So, I say, there's 100 stores this year.

How many of those might be Twin Peaks?.

20 to 30..

This year?.

Yes..

This year?.

Probably 20 Twin Peaks this year. Yeah. Twin Peaks has explosive growth, same as Fazoli's, probably 20 Fazoli's this year..

Okay..

That's 40 out of 120 and then you've got the burger brands and pizza, cookies and stuff like that..

Twin Peaks is a huge incremental volume and royalty increment just from this year. Okay. Thanks very much for the moment. Thank you..

Yeah. You bet. And just growing those new store openings and growing the factory business is just really going to deliver high acceleration in our EBITDA run rate. So, we're very focused on it. All right. Operator, I don't see any further questions..

Yeah. Over to you for any further closing comments..

Thank you, operator. I would like just to thank everyone for participating in today's call. And with no further questions, we'll end the call for today. Thank you again..

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today..