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Robbins Arroyo LLP: FAT Brands Inc. (FAT) Misled Shareholders According to a Recently Filed Class Action

Shareholder rights law firm Robbins
Arroyo LLP announces that purchasers of FAT Brands Inc. (NasdaqCM:
FAT) have filed a class action complaint against the company’s officers
and directors for alleged violations of the Securities Act of 1933
pursuant to FAT’s October 23, 2017 initial public offering (“IPO”). FAT,
a multi-brand franchising company, acquires, markets, and develops fast
casual and casual dining restaurant concepts.

View this information on the law firm’s Shareholder Rights Blog: www.robbinsarroyo.com/fat-brands-inc

FAT Accused of Misrepresenting Its Sales Growth and Cash Flow in
Its Offering Documents

According to the complaint, on October 23, 2017, FAT held its IPO,
selling 2 million shares of common stock and raising $24 million in
gross proceeds. FAT officials subsequently emphasized that FAT’s
asset-light business model allows for growth with minimal capital
expenditures through franchising. Despite these representations, FAT’s
then-present free cash flow was not enough to cover its outsized
dividend. In addition, at the time of the IPO, FAT failed to disclose
that its sales growth had significantly declined and that the
fast-casual dining sector was facing slowdown in growth due to customers
fleeing to lower cost, quicker fast-food chains. When the market learned
the truth about FAT’s business metrics and financial prospects, FAT’s
stock plummeted, and now trades less than $8 per share, a 34% decrease
from its IPO price.

FAT Shareholders Have Legal Options

Concerned shareholders who would like more information about their
rights and potential remedies can contact attorney Leonid Kandinov at
(800) 350-6003, LKandinov@robbinsarroyo.com,
or via the shareholder
information form on the firm’s website.

Robbins Arroyo LLP is a nationally recognized leader in shareholder
rights law. The firm represents individual and institutional investors
in shareholder derivative and securities class action lawsuits, and has
helped its clients realize more than $1 billion of value for themselves
and the companies in which they have invested.

Attorney Advertising. Past results do not guarantee a similar outcome.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180618005929/en/