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Franchisor Fat Brands, Which Acquired Nestle Toll House Cafe by Chip, Is Rebranding With Great American Cookies; Franchisor’s Former CEO Is Under Federal Investigation For Wire Fraud, Money Laundering, Tax Evasion
By Tina Traster
Belinda Poblete believes in the franchising template – so much so she’s been operating two franchises under one New City roof since 2018. And even though one franchise has been gobbled up by a competitor, the result for Poblete is that her product mix still includes cookies and cakes.
Poblete’s franchising odyssey began in 2016 with a windfall from a Cash4Life lottery win. The Sloatsburg resident, who’d been working for a health care company processing administrative records, won $7 million but chose to take a lump sum of about $4.6 million. Poblete prefers not to talk about what she did with the money but a portion of it was used to buy a Red Mango Yogurt Café Smoothie and Juice Bar franchise, which is located at 300 South Main Street in New City. At the time, Poblete divided her space to include a second franchise, Nestle Toll House Café by Chip.
Last May, FAT Brands Inc. acquired 85 Nestle Toll House Café by Chip franchises from Crest Foods for an undisclosed amount and has begun rebranding the dessert shops as Great American Cookies, which FAT Brands also owns.
Poblete held an opening of Great American Cookies on June 11. There is a Great American Cookies at The Palisades Center in West Nyack, which is owned by a different franchisee.
“There are great instances where co-branding thrives,” said Erin Mandzik, spokesperson for FAT Brands, (Fresh, Authentic and Tasty), a publicly traded company. “Traditionally we co-brand within our brands but sometimes, in one-off instances, we team up and align with a brand like Red Mango.” One of FAT Brands’ concepts is Marble Slab Creamery, which is often teamed up with Great American Cookies franchises.
Founded on a family chocolate chip cookie recipe in 1977, Great American Cookies makes the Original Cookie Cake, soft-baked cookies, brownies, and Double Doozies™, icing sandwiched between two cookies. There are more than 370 locations in 31 states, and internationally in Bahrain, Guam, and Saudi Arabia. In June, Great American Cookies opened its first store in Anchorage, Alaska.
“This year, Great American Cookies arrived in Arizona, New Mexico, and Illinois,” said Allison Lauenstein, President of Great American Cookies. “Growing domestically has been a key growth pillar for us so we are pleased to be able to expand our footprint to four new states, including Alaska, in just a few months.
The franchisor requires retailers to have spaces ranging from 400- to 1,200 square feet, and takes a 6 percent royalty on sales.
Poblete said owning franchises eases some of the headaches business owners typically encounter. Franchises offer marketing support, as well as templates for how products are produced and sold.
When contemplating how to transition from being an employee to a business owner, Poblete thought hard about the two roads. “I can open my own business, but the economy is difficult,” she said. “Franchises help you. They’re there. They have a name.”
Even so, Poblete, who has become a specialist at cake decorations for the FAT Brands products she sells says much of her success over the last five years, including the pandemic, boils down to relationships and loyalty. She has about a dozen employees.
“I tell my friends a franchise is good but true success is up to you as the business owner,” she said. “You are a retailer, dealing with customers, facing them every day, that’s what matters. How you communicate and connect with them. That’s what I’ve learned.”
Poblete, who immigrated with her husband from the Philippines in 2002, knows more than most that life is a combination of reasoned choices and gambles. She had frequently bought lottery tickets and still does occasionally. But she understood from the day she unexpectedly reeled in the big fish that life is a long game and working is a foundational requirement for most people.
“Money can change a person,” she said. “But even if I did get a windfall, I asked myself ‘what now, who am I?” she said.
Poblete, who said she’s a hard worker and says she loves to work, was not prepared to squander a once-in-a-lifetime chance. She works seven days a week at her business. That, she says, is what defines her.
Meanwhile FAT Brands is doing some of its own re-defining.
In May, Andy Wiederhorn stepped down as CEO of FAT Brands, transitioning to a strategic adviser role. He has said he is seeking to eliminate the distraction of a federal investigation into the company and his family. In February 2022, the Los Angeles Times reported that an FBI special agent accused Wiederhorn in an affidavit of receiving millions in “sham loans.” The executive’s son’s home was raided in December 2022 by federal agents, who removed tax documents, computers, and other records. Wiederhorn and his family’s company, Fog Cutter Capital Group Inc., maintain a controlling interest (55.5 percent) in the company. Accusations against Wiederhorn and his relatives’ company include securities and wire fraud, money laundering and attempted tax evasion.
Fat Brands went public in 2017, raising $24 million. In the past three years, the company has gone on an acquisition spending spree, snapping up Round Table Pizza, Marble Slab Creamery, Great American Cookies, Twin Peaks, Global Franchise Group, Fazoli’s, Native Grill & Wings and others. Fat Brands acquired Twin Peaks in 2021 for $300 million.
FAT Brands acquires, markets, and develops fast-casual, quick-service, casual dining, and casual dining concepts worldwide. The franchisor owns 2,300 units spread across 17 restaurant brands. Fat Brands has made a name for itself by acquiring brands but now it plans to spin off Twin Peaks.
FAT Brands own Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses.