Massive restaurant operator files Chapter 11 as closures hit multiple states

A major restaurant conglomerate behind brands like FAT Brands, Fatburger, Johnny Rockets, and Smokey Bones is facing mounting financial pressure after filing for Chapter 11 bankruptcy earlier this year, triggering widespread closures and asset sales across its portfolio.

Bankruptcy filing follows massive debt buildup

FAT Brands and affiliate Twin Hospitality Group filed for Chapter 11 bankruptcy protection on Jan. 26, 2026, in Texas, citing more than $1.4 billion in debt tied to years of aggressive acquisitions. The company said the restructuring would help stabilize operations while keeping many restaurants open during the process. 

The parent company owns 18 restaurant concepts and more than 2,200 locations worldwide, including Fatburger, Round Table Pizza, Fazoli’s, Twin Peaks, and Great American Cookies. 

In March 2026, court filings revealed FAT Brands was exploring asset sales as creditors pushed for repayment and control over company finances. 

Smokey Bones closures accelerate in 2026

One of the biggest fallout stories from the bankruptcy has been the collapse of Smokey Bones.

Earlier this year, Twin Hospitality announced plans to close 15 underperforming Smokey Bones restaurants while converting others into Twin Peaks locations. 

But by late April, the situation worsened dramatically. Smokey Bones abruptly shut down all remaining locations nationwide on April 27 and April 28, affecting restaurants across Pennsylvania, New York, Ohio, Michigan, Illinois, Rhode Island, and other states. Employees at several locations reportedly received little advance notice. 

The chain had once operated nearly 130 restaurants nationwide before shrinking to roughly 20 remaining units before the final closures. 

Franchisee disputes emerge

The bankruptcy proceedings have also sparked disputes with franchisees. In May 2026, dozens of Great American Cookies operators accused FAT Brands of pricing abuses and contract violations tied to rising supply costs. 

As the restructuring continues, analysts say additional restaurant sales, closures, and ownership changes could still be ahead for the company’s remaining brands.

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