Restaurant chain operator FAT Brands Inc., the parent company of over 2,000 locations including Smokey Bones and Johnny Rockets, has filed for Chapter 11 bankruptcy. The company closed 32 company-owned locations and plans to reject leases, a move that will eliminate over $492,000 in monthly lease payments. This follows a default on $1.3 billion in debt.

FAT Brands' financial struggles stem from its inability to make a quarterly payment to its lender, UMB Bank NA, leading to potential foreclosure. The company listed over $582 million in assets and over $95 million in debts in its petition. CEO Andy Wiederhorn stated the bankruptcy will allow them to strengthen their capital structure.

The company operates 15 other restaurant brands, including Fatburger and Marble Slab Creamery. The court's approval of the lease rejections will be a critical step. The Chapter 11 process aims to restructure and stabilize the business, but the long-term impact on the remaining locations remains to be seen.

Investors will be watching closely to see how FAT Brands navigates the bankruptcy proceedings. The company's ability to restructure its debt and maintain its remaining brands' operational viability will be key. The fast-casual dining industry has faced challenges in recent years with rising costs and changing consumer preferences.