You may have heard of Johnny Rockets, Elevation Burger, and Hurricane Grill and Wings. These are just three of the brands under the umbrella of FAT (Fresh. Authentic. Tasty.) Brands. You may also have heard of the US EB-5 Programme, which allows investors to invest $500,000 (for a limited time only before the price increases), in a US project for a green card which includes the investor, the spouse, and any children under the age of 21. What you may not know is that FAT Brands will be allowing investors to make the $500,000 required EB-5 investment into one of their franchise locations to become eligible for a green card. Here is how you can participate.
A little about FAT Brands
FAT Brands is a leading global franchising company that has been in existence since 1952, and is by no means new to the food and beverage game. In 2000, FAT Brands grew with popularity among celebrity investors including basketball legend, Magic Johnson. With a strategy of acquiring, marketing and developing various fast and casual dining concepts, FAT has managed to grow over the last 70 years and became publicly listed on NASDAQ in 2017 (NASDAQ: FAT). FAT boasts an umbrella of brands under its belt including Fatburger, Johnny Rockets, Hurricane Grill and Wings, Elevation Burger, Ponderosa, Buffalo’s Café, Buffalo’s Express, Bonanza Steakhouses and Yalla Mediterranean.
After its recent merger with Global Franchise Group, FAT has franchised over 2,000 stores in 36 countries worldwide, including right here in the UAE. Although the food and beverage industry was hit hard by the pandemic in 2020, FAT Brands was minimally affected and continues to expand with the new acquisition of the Global Franchise Group in 2021 at $442.5 million.
A little about the opportunity
FAT Brand’s aggressive growth plan affords a wonderful opportunity for anyone interested in the EB-5 programme, or for any entrepreneur with a vision. With Americans alone consuming over 50 billion hamburgers per year, it is no wonder FAT brands has seen such great success.
Investors may now invest $500,000 in a FAT Brands franchise location for a green card under the EB-5 Programme and under two separate models. The first is completely passive, in which the investor acquires 1 per cent interest in the company with an asset-backed investment, while the store is completely run and operated by FAT Brands or one of their multilocation operators. The investment is made for a period of five years, after which the store will be refinanced, sold, or bought back by FAT Brands and the investor can exit the programme completely with a full refund of their initial investment.
Under this passive model, everything is taken care of for the investor, including the 15 year lease guaranteed by the operator, and all working capital provided by the operator itself, which offers the investor very limited liability in the entire operation. Here, the main goal is qualifying for the EB-5 Programme and getting the green card for the investor and his/her family.
Under the second model, and for those with more of a vision, the investment can be made into a franchise location of FAT Brands, where the investor will take on an active role of day-to-day management and operation of a FAT Brands franchise. Under this model, the investor can own up to 100 per cent of the operation. The investor can then decide after five years whether to sell or remain invested.
Why FAT brands is a good EB-5 investment
Under the EB-5 Programme, one of the main requirements is the creation of ten jobs for US citizens via the applicant’s investment. The average FAT Brands franchise location creates 20 to 25 jobs for US citizens. This means there is a surplus of over 100 per cent of jobs created to qualify for the EB-5 Programme.
Typically, large-scale EB-5 projects see the investor attain 1/10th of a per cent as a limited member of their investment, with no actual security in the development project itself being guaranteed. However, because of the smaller scale of the FAT Brands EB-5 investment, the investor attains at least 1 per cent, while also obtaining 100 per cent asset-backed collateralisation in the actual location in which they invest. This means they have ownership of all of the assets of the location as security for their investment.
FAT Brands boast a 99 per cent success rate in their store operations. That means that 99 per cent of stores operate profitably. The 1 per cent off chances are for those with unforeseen circumstances such as unexpected construction in front of the store, which limits access for example. Because the investor is partnered with a multilocation operator that has a vested interest in the success of the store, chances are high that the store will be profitable and successful. In addition to this, FAT Brands does years of market research in choosing the geographic locations of their stores, which offers more chances of success for any investor.
If something was to go wrong in a large-scale EB-5 project, there are very limited troubleshooting options one can turn to, as developers usually have only one project on at any given time. However, because FAT Brands opens and operates multiple brands simultaneously, there are several options in the less than 1 per cent chance a store is not successful. They can move the investor to a new location for example, which would allow the immigration process to continue.
Finally, let us not forget the vast experience FAT Brands has built over 70 years in the global food and beverage industry. Many immigrants have invested in FAT Brands locations over the past years under the L1, E2, EB1-C and EB-5 Programmes, and the investments have been structured adequately to meet all US government requirements. When investing in the EB-5 Programme, it is important to work with an experienced project and an experienced team.
Currently, the EB-5 Programme is at $500,000, however it won’t remain like this for long. Changes are expected as soon as September 30. Once reauthorisation of the program is announced, it is likely that the price will change as well.
Your EB-5 team matters
FAT Brands has chosen to work exclusively with Step Global DMCC for this EB-5 opportunity. Step Global is a team of highly experienced lawyers and immigration specialists with over 12 years of experience in the US EB-5 industry. They have a 100 per cent track record of approvals on all applications and have worked with investors across the Middle East, India, and Africa. For more information on this FAT Brands opportunity, please contact Step Global today.
— The writer is Managing Director, Step Global
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