FAT Brands (FAT) 10-Q 15 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 01, 2018	Aug. 13, 2018
Document And Entity Information
Entity Registrant Name	Fat Brands, Inc
Entity Central Index Key	1,705,012
Document Type	10-Q
Document Period End Date	Jul. 1, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,342,532
Trading Symbol	FAT
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Current assets
Cash	$ 955	$ 32
Accounts receivable, net of allowance for doubtful accounts of $676 and $679, respectively	1,308	918
Trade notes receivable, net of allowance for doubtful accounts of $17	152	77
Other current assets	354	153
Total current assets	2,769	1,180
Trade notes receivable - noncurrent, net of allowance of $17 for doubtful accounts	244	346
Due from affiliates	8,967	7,963
Deferred income taxes	1,815	937
Goodwill	7,356	7,356
Other intangible assets, net	10,955	11,011
Other assets	371	7
Buffalo's creative and advertising fund		436
Total assets	32,477	29,236
Liabilities
Accounts payable	2,404	2,439
Deferred income	1,162	1,772
Accrued expenses	1,487	1,761
Accrued advertising	761	348
Dividend payable on common shares	1,352
Accrued interest payable to FCCG		405
Dividend payable on mandatorily redeemable preferred shares	53
Current portion of note payable to FCCG	950
Current portion of long-term debt	2,063
Total current liabilities	10,232	6,725
Deferred income - noncurrent	5,745	1,941
Mandatorily redeemable preferred shares	9,888
Deferred dividend payable on mandatorily redeemable preferred shares	25
Notes payable to FCCG		18,125
Buffalo's creative and advertising fund-contra		436
Total liabilities	25,890	27,227
Commitments and contingencies (Note 13)
Stockholders' equity
Common stock, $.0001 par value; 25,000,000 shares authorized; 11,184,767 and 10,000,000 shares issued and outstanding at July 1, 2018 and December 31, 2017, respectively	8,990	2,622
Accumulated deficit	(2,403)	(613)
Total stockholders' equity	6,587	2,009
Total liabilities and stockholders' equity	$ 32,477	$ 29,236

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, net of allowance for doubtful accounts	$ 676	$ 679
Trade notes receivable, net of allowance for doubtful accounts	17	17
Trade notes receivable - noncurrent, net of allowance for doubtful accounts	$ 17	$ 17
Common stock, par value	$ .0001	$ .0001
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	11,184,767	10,000,000
Common stock, shares outstanding	11,184,767	10,000,000

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Revenue
Royalties	$ 2,860	$ 5,432
Franchise fees	299	698
Store opening fees	105	105
Advertising fees	630	1,226
Management fees	14	32
Total revenue	3,908	7,493
General and administrative expenses
Compensation and employee benefits	1,459	2,790
Travel and entertainment	203	327
Professional fees	348	558
Advertising expense	630	1,226
Other	441	824
Total general and administrative expenses	3,081	5,725
Income from operations	827	1,768
Non-operating income (expense)
Interest expense, net	(222)	(436)
Interest expense related to mandatorily redeemable preferred shares	(78)	(78)
Depreciation and amortization	(40)	(73)
Other expense, net	(2)	(3)
Total non-operating expense	(342)	(590)
Income before taxes	485	1,178
Income tax expense	112	296
Net income	$ 373	$ 882
Basic income per common share	$ 0.04	$ 0.09
Basic weighted average shares outstanding	10,179	10,090
Diluted income per common share	$ 0.04	$ 0.09
Diluted weighted average shares outstanding	10,179	10,090
Cash dividends declared per common share	$ 0.12	$ 0.24

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Equity - 6 months ended Jul. 01, 2018 - USD ($) $ in Thousands	Common Stock [Member]	Par Value [Member]	Additional paid-in capital [Member]	Accumulated Deficit [Member]	Total
Balance, Beginning at Dec. 31, 2017	$ 2,622	$ 1	$ 2,621	$ (613)	$ 2,009
Balance, Beginning, shares at Dec. 31, 2017	10,000,000
Cumulative-effect adjustment from adoption of ASU 2014-09, Revenue from Contracts with Customers				(2,672)	(2,672)
Net income				882	882
Dividends on common stock			(2,551)		(2,551)
Issuance of stock in lieu of director fees payable			330		330
Issuance of stock in lieu of director fees payable, shares	41,772
Issuance of common stock in payment of related party note			7,272		7,272
Issuance of common stock in payment of related party note, shares	989,395
Issuance of stock in lieu of dividend payable to FCCG			960		960
Issuance of stock in lieu of dividend payable to FCCG, shares	153,600
Issuance of warrants to purchase common stock			112		112
Share-based compensation			245		245
Share-based compensation, shares
Balance, Ending at Jul. 01, 2018	$ 8,990	$ 1	$ 8,989	$ (2,403)	$ 6,587
Balance, Ending, shares at Jul. 01, 2018	11,184,767

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (Unaudited) $ in Thousands	6 Months Ended
	Jul. 01, 2018USD ($)
Cash flows from operating activities
Net income	$ 882
Adjustments to reconcile net income to net cash provided by operations:
Deferred income taxes	(66)
Recovery of bad debts	(8)
Depreciation and amortization	73
Share-based compensation	245
Change in:
Accounts receivable	(264)
Trade notes receivable	27
Prepaid expenses	(201)
Accounts payables and accrued expense	(410)
Accrued advertising	(176)
Accrued interest payable	(405)
Deferred dividend on mandatorily redeemable shares	78
Deferred income	(290)
Total adjustments	(1,385)
Net cash used in operating activities	(503)
Cash flows from investing activities
Investment in equipment	(88)
Net cash used in investing activities	(88)
Cash flows from financing activities
Issuance of mandatorily redeemable preferred shares and associated warrants	8,000
Proceeds from borrowings, net of issuance costs	1,882
Repayments of loans from FCCG	(7,903)
Change in due from affiliates	(218)
Dividends paid in cash	(240)
Deposit toward potential equity issue	(7)
Net cash provided by financing activities	1,514
Net increase in cash	923
Cash at beginning of period	32
Cash at end of period	955
Supplemental disclosures of cash flow information:
Cash paid for interest	1,319
Cash paid for income taxes	116
Supplemental disclosure of non-cash financing and investing activities:
Assets acquired under capital leases and accrued expenses	121
Dividends payable on common stock	1,352
Dividends reinvested in common stock	960
Note payable to FCCG converted to common and preferred stock	9,272
Director fees converted to common stock	330
Income taxes payable offset against amounts due from affiliates	$ 204

Organization and Relationships

Organization and Relationships	6 Months Ended
	Jul. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Relationships	NOTE 1 – ORGANIZATION AND RELATIONSHIPS FAT Brands Inc. (the “Company”) was formed on March 21, 2017 as a wholly-owned subsidiary of Fog Cutter Capital Group Inc. (“FCCG”). On October 20, 2017, the Company completed an initial public offering and issued additional shares of common stock representing 20 percent of its ownership (the “Offering”). The Company’s common stock trades on the Nasdaq Capital Market under the symbol “FAT.” Concurrent with the Offering, two subsidiaries of FCCG, Fatburger North America, Inc. (“Fatburger”) and Buffalo’s Franchise Concepts, Inc. (“Buffalo’s”) were contributed to the Company by FCCG in exchange for a $30,000,000 note payable (the “Related Party Debt”). FCCG also contributed the newly acquired operating subsidiaries of Homestyle Dining LLC: Ponderosa Franchising Company, Bonanza Restaurant Company, Ponderosa International Development, Inc. and Puerto Rico Ponderosa, Inc. (collectively, “Ponderosa”). These subsidiaries conduct the worldwide franchising of the Ponderosa Steakhouse Restaurants and the Bonanza Steakhouse Restaurants. The Company provided $10,550,000 of the net proceeds from the Offering to FCCG to consummate the acquisition of Homestyle Dining LLC. The Company did not begin operations until October 20, 2017. As a result, prior year comparative results are not presented in the accompanying statement of operations and statement of cash flows. At July 1, 2018, certain Company officers and directors controlled, directly or indirectly, a significant voting majority of the Company.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of operations Fatburger restaurants serve a variety of freshly made-to-order Fatburgers, Turkeyburgers, Chicken Sandwiches, Veggieburgers, French fries, onion rings, soft-drinks and milkshakes. Buffalo’s grants franchises for the operation of casual dining restaurants (Buffalo’s Southwest Cafés) and quick service restaurants outlets (Buffalo’s Express). These restaurants specialize in the sale of Buffalo-Style chicken wings, chicken tenders, burgers, ribs, wrap sandwiches, and salads. Ponderosa and Bonanza Steakhouses offer guests a high-quality buffet and broad array of great tasting, affordably-priced steak, chicken and seafood entrées. Buffets at Ponderosa and Bonanza Steakhouses feature a large variety of all you can eat salads, soups, appetizers, vegetables, breads, hot main courses and desserts. Bonanza Steak & BBQ operates full service steakhouses with fresh farm-to-table salad bar, including a menu showcase of USDA flame-grilled steaks, house-smoked BBQ and contemporized interpretations of traditional American classics. The Company also co-brands its franchise concepts. These co-branded restaurants sell products of multiple affiliated brands and share back-of-the-house facilities. The Company operates on a 52-week calendar and its fiscal year ends on the Sunday closest to December 31. Consistent with the industry practice, the Company measures its stores’ performance based upon 7-day work weeks. Using the 52-week cycle ensures consistent weekly reporting for operations and ensures that each week has the same days, since certain days are more profitable than others. The use of this fiscal year means a 53 rd Principles of consolidation Use of estimates in the preparation of the consolidated financial statements Franchise fees and royalty revenue Store opening fees – Advertising – Goodwill and other intangible assets Accounts receivable Trade notes receivable – Trade Share-based compensation Income taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. We utilize a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon the ultimate settlement. Earnings per share Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue From Contracts With Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated standard replaces most existing revenue recognition guidance in U.S. GAAP. These standards became effective for the Company on January 1, 2018. These standards require that the transaction price received from customers be allocated to each separate and distinct performance obligation. The transaction price attributable to each separate and distinct performance obligation is then recognized as the performance obligations are satisfied as specified in the contract. The agreements for services provided by the Company related to upfront fees received from franchisees (such as initial or renewal fees) do not currently contain separate and distinct performance obligations from the franchise right and thus those upfront fees will be recognized as revenue over the term of each respective franchise agreement. Previously, we recognized upfront franchise fees such as initial and renewal fees when the related services have been provided, which is when a store opened for initial fees and when renewal options became effective for renewal fees. These standards require any unamortized portion of fees received prior to adoption be presented in the consolidated balance sheet as a contract liability. The new standards also had an impact on transactions previously not included in the Company’s revenues and expenses such as franchisee contributions to and subsequent expenditures from advertising arrangements we have with our franchisees. The Company did not previously include these contributions and expenditures in its consolidated statements of operations or cash flows. Under the new standards, the Company will recognize advertising fees and the related expense in its consolidated statements of operations or cash flows. The Company will also consolidate the assets and liabilities related to advertising funds on its balance sheet. These standards will not impact the recognition of our sales-based royalties from franchisees, which is generally our largest source of revenue. We have implemented internal controls related to the recognition and presentation of the Company’s revenues under these new standards. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method, in which the cumulative effect of applying the standard would be recognized at the date of initial application. An adjustment to increase deferred revenue in the amount of $3,482,000 was established on the date of adoption relating to fees received through December 31, 2017 that would have been deferred and recognized over the term of each respective franchise store agreement if the new guidance had been applied in the past. A deferred tax asset of $810,000 related to this contract liability was also established on the date of adoption. These adjustments had the effect of increasing beginning accumulated deficit by approximately $2,672,000. Adopting the new accounting standards for revenue affected several financial statement line items for the twenty-six weeks ended July 1, 2018. The following tables provide the affected amounts as reported in these Unaudited Consolidated Financial Statements compared with what they would have been if the previous accounting guidance had remained in effect. As of July 1, 2018 (in thousands) Amounts As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Balance Sheet: Accounts receivable $ 1,308 $ 1,231 Due from affiliates $ 8,967 $ 8,493 Deferred income taxes $ 1,815 $ 1,003 Buffalo’s Creative and Advertising Fund $ - $ 330 Buffalo’s Creative and Advertising Fund - Contra $ - $ 330 Accounts payable $ 2,404 $ 2,081 Deferred income $ 6,907 $ 3,790 Accrued expenses $ 1,487 $ 1,476 Accrued advertising $ 761 $ 545 Accumulated deficit $ (2,403 ) $ (97 ) For the twenty-six weeks ended July 1, 2018 (in thousands except per share data) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Operations: Franchise fees $ 698 $ 331 Advertising fees $ 1,226 $ - Advertising expense $ 1,226 $ - Net income $ 882 $ 516 Earnings per common share - basic $ 0.09 $ 0.05 Earnings per common share - diluted $ 0.09 $ 0.05 For the twenty-six weeks ended July 1, 2018 (in thousands) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Cash Flows: Net income $ 882 $ 516 Adjustments to reconcile net income to net cash provided by operating activities: Accounts receivable $ (264 ) $ (313 ) Deferred income $ (290 ) 77 Accounts payable and accrued expenses $ (410 ) $ (643 ) Accrued advertising $ (176 ) $ 197 Increase in due from affiliates $ (218 ) $ (530 ) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment, which simplifies the accounting for goodwill impairment. This ASU removes Step 2 of the goodwill impairment test, which requires hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The new guidance also requires disclosure of the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 is effective for the Company beginning January 1, 2020. We elected to early adopt this standard when performing our annual goodwill impairment test in 2017. The adoption of this ASU did not have a significant financial impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. This standard provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The amendments in this ASU are effective beginning January 1, 2018, with early adoption permitted. This ASU is to be applied prospectively on and after the effective date. We adopted this ASU during 2017. The adoption of this ASU did not have a significant financial impact on our consolidated financial statements. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. This ASU is effective for interim and annual period beginning after December 15, 2018 and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements, with certain practical expedients available. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU No.2018-07, Compensation- Stock Compensation (Topic 718). Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to this update, Top 718 applied only to share-based transactions to employees. Consistent with the accounting requirements for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The amendments in the update are effective for public business entities form fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of this accounting standard is not expected to have a material effect on the Company’s consolidated financial statements.

Goodwill

Goodwill	6 Months Ended
	Jul. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Note 3. GOODWILL Goodwill consists of the following (in thousands): July 1, 2018 December 31, 2017 Goodwill: Fatburger $ 529 $ 529 Buffalo’s 5,365 5,365 Ponderosa 1,462 1,462 Total goodwill $ 7,356 $ 7,356

Other Intangible Assets

Other Intangible Assets	6 Months Ended
	Jul. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Other Intangible Assets	Note 4. OTHER INTANGIBLE ASSETS Intangible assets consist of the following (in thousands): July 1, 2018 December 31, 2017 Trademarks: Fatburger $ 2,135 $ 2,135 Buffalo’s 27 27 Ponderosa 7,230 7,230 Total trademarks 9,392 9,392 Franchise agreements: Ponderosa – cost 1,640 1,640 Ponderosa – accumulated amortization (77 ) (21 ) Total franchise agreements 1,563 1,619 Total $ 10,955 $ 11,011 The expected future amortization of the Company’s capitalized franchise agreements is as follows (in thousands): Fiscal year: 2018 $ 55 2019 110 2020 110 2021 110 2022 110 Thereafter 1,068 Total $ 1,563

Deferred Income

Deferred Income	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Deferred Income	Note 5. DEFERRED INCOME Deferred income is as follows: July 1, 2018 December 31, 2017 Deferred franchise fees $ 6,122 $ 2,781 Deferred royalties 785 932 Total $ 6,907 $ 3,713

Income Taxes

Income Taxes	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Note 6. Income Taxes Effective October 20, 2017, the Company entered into a Tax Sharing Agreement with FCCG that provides that FCCG will, to the extent permitted by applicable law, file consolidated federal, California and Oregon (and possibly other jurisdictions where revenue is generated, at FCCG’s election) income tax returns with the Company and its subsidiaries. The Company will pay FCCG the amount that its current tax liability would have been had it filed a separate return. To the extent the Company’s required payment exceeds its share of the actual combined income tax liability (which may occur, for example, due to the application of FCCG’s net operating loss carryforwards), the Company will be permitted, in the discretion of a committee of its board of directors comprised solely of directors not affiliated with or having an interest in FCCG, to pay such excess to FCCG by issuing an equivalent amount of its common stock in lieu of cash, valued at the fair market value at the time of the payment. An inter-company receivable of approximately $8,967,000 due from FCCG and its affiliates will be applied first to reduce excess income tax payment obligations to FCCG under the Tax Sharing Agreement. For financial reporting purposes, the Company has recorded a tax provision calculated as if the Company files its tax returns on a stand-alone basis. The amount payable to FCCG determined by this calculation of $204,000 was offset against amounts due from FCCG as of July 1, 2018 (see Note 10). Deferred taxes reflect the net effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for calculating taxes payable on a stand-alone basis. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): July 1, 2018 December 31, 2017 Deferred tax assets (liabilities) Deferred income $ 1,801 $ 882 Reserves and accruals 456 451 Intangibles (416 ) (372 ) Deferred state income tax (51 ) (25 ) Loss carryforward 25 1 Total $ 1,815 $ 937 Components of the income tax provision are as follows (in thousands): Twenty-Six Weeks Ended July 1, 2018 Current Federal $ 204 State 49 Foreign 109 362 Deferred Federal (46 ) State (20 ) (66 ) Total income tax provision $ 296 Income tax provision related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax income as follows (in thousands): Twenty-Six Weeks Ended July 1, 2018 Tax provision at statutory rate 21 % State and local income taxes 2 % Other 2 % Total income tax provision 25 % As of July 1, 2018, the Company’s subsidiaries’ annual tax filings for the prior three years are open for audit by Federal and for the prior four years for state tax agencies. The Company is the beneficiary of indemnification agreements from the prior owners of the subsidiaries for tax liabilities related to periods prior to their contribution. Management evaluated the Company’s overall tax positions and has determined that no provision for uncertain income tax positions is necessary as of July 1, 2018.

Senior Secured Redeemable Deben

Senior Secured Redeemable Debentures	6 Months Ended
	Jul. 01, 2018
Debt Disclosure [Abstract]
Senior Secured Redeemable Debentures	Note 7. Senior Secured Redeemable Debentures On April 27, 2018, the Company established a credit facility with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”). The Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with TCA, pursuant to which TCA agreed to lend the Company up to $5,000,000 through the purchase of Senior Secured Redeemable Debentures issued by the Company (the “Debentures”). A total of $2,000,000 was funded by TCA in connection with the initial closing on April 27, 2018, and the Company issued to TCA an initial Debenture with a face amount of $2,000,000, maturing on October 27, 2019 and bearing interest at the rate of 15% per annum. The Company had the right to prepay the , in whole or in part, at any time prior to maturity without penalty. The amounts borrowed under the Purchase Agreement were guaranteed by the Company’s operating subsidiaries and by FCCG, pursuant to a Guaranty Agreement in favor of TCA. The Company’s obligations under the Debentures were also secured by a Security Agreement, granting TCA a security interest in substantially all of its assets. In addition, FCCG’s obligations under the Guaranty Agreement were secured by a pledge in favor of TCA of certain shares of common stock that Fog Cutter holds in the Company. During the term of the Purchase Agreement, the Company was prohibited from incurring additional indebtedness, with customary exceptions for ordinary course financing arrangements and subordinated indebtedness. The Company recognized interest expense of $63,000 for the thirteen and twenty-six weeks ended July 1, 2018. The entire balance of the Debenture was paid in full on July 3, 2018 and the credit facility was terminated. As a result, the full amount of the Debentures was classified as a current liability on the accompanying financial statements.

Note Payable to FCCG

Note Payable to FCCG	6 Months Ended
	Jul. 01, 2018
Debt Disclosure [Abstract]
Note Payable to FCCG	Note 8. NOTE PAYABLE To FCCG Effective October 20, 2017, FCCG contributed two of its operating subsidiaries, Fatburger and Buffalo’s, to the Company in exchange for an unsecured promissory note with a principal balance of $30,000,000, bearing interest at a rate of 10.0% per annum, and maturing in five years (the “Related Party Debt”). The contribution was consummated pursuant to a Contribution Agreement between the Company and FCCG. Approximately $19,778,000 of the note payable to FCCG was subsequently repaid, reducing the balance to $10,222,000 at June 26, 2018. On June 27, 2018, the Company entered into the Note Exchange Agreement, as amended, under which it agreed with FCCG to exchange $9,272,053 of the remaining balance of the Company’s outstanding Related Party Debt for shares of capital stock of the Company in the following amounts: ● $2,000,000 of the Related Party Debt balance was exchanged for 20,000 shares of Series A Fixed Rate Cumulative Preferred Stock of the Company at $100 per share and warrants to purchase 25,000 of the Company’s common stock with an exercise price of $8.00 per share; and ● A portion of the remaining Related Party Debt balance of $7,272,053 was exchanged for 989,395 shares of Common Stock of the Company, representing an exchange price of $7.35 per share, which was the closing trading price of the Common Stock on June 26, 2018. Following the exchange, the remaining balance of the Related Party Debt was $950,000. The transactions described above were exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. The Company recognized interest expense on the note payable to FCCG of $412,000 and $864,000 for the thirteen and twenty-six weeks ended July 1, 2018, respectively.

Mandatorily Redeemable Preferre

Mandatorily Redeemable Preferred Stock	6 Months Ended
	Jul. 01, 2018
Mandatorily Redeemable Preferred Stock
Mandatorily Redeemable Preferred Stock	Note 9. MANDaTORilY REDEEMABLE PREFERRED STOCK On June 8, 2018, the Company filed a Certificate of Designation of Rights and Preferences of Series A Fixed Rate Cumulative Preferred Stock with the Secretary of State of the State of Delaware (the “Certificate of Designation”), designating a total of 100,000 shares of Series A Preferred Stock. The Certificate of Designation contains the following terms pertaining to the Series A Preferred Stock: Dividends Voting Rights Liquidation and Redemption In addition, prior to the Mandatory Redemption Date, the Company may optionally redeem the Series A Preferred Stock, in whole or in part, at the following redemption prices per share, plus any accrued and unpaid dividends: (i) On or prior to June 30, 2021: $115.00 per share. (ii) After June 30, 2021 and on or prior to June 30, 2022: $110.00 per share. (iii) After June 30, 2022: $100.00 per share. Holders of Series A Preferred Stock may also optionally cause the Company to redeem all or any portion of their shares of Series A Preferred Stock beginning any time after the two-year anniversary of the initial issuance date for an amount equal to $100.00 per share plus any accrued and unpaid dividends, which amount may be settled in cash or Common Stock of the Company, at the option of the holder. If a holder elects to receive Common Stock, the shares will be issued based on the 20-day volume weighted average price of the Common Stock immediately preceding the date of the holder’s redemption notice. On June 7, 2018, the Company entered into a Subscription Agreement for the issuance and sale (the “Offering”) of 800 units (the “Units”), with each Unit consisting of (i) 100 shares of the Company’s newly designated Series A Fixed Rate Cumulative Preferred Stock (the “Series A Preferred Stock”) and (ii) a warrant to purchase 125 shares of the Company’s Common Stock (the “Warrants”) at $8.00 per share. The sales price of each Unit was $10,000, resulting in gross proceeds to the Company from the initial closing of $8,000,000. On June 27, 2018, the Company entered into a Note Exchange Agreement, as amended, under which it agreed with FCCG to exchange all but $950,000 of the remaining balance of the Company’s outstanding Promissory Note issued to the FCCG on October 20, 2017, in the original principal amount of $30,000,000 (the “Note”). At the time, the Note had an estimated outstanding balance of principal plus accrued interest of $10,222,000 (the “Note Balance”). On June 27, 2018 $9,272,053 of the Note Balance was exchanged for shares of capital stock of the Company and warrants in the following amounts (the “Exchange Shares”): ● $2,000,000 of the Note Balance was exchanged for 20,000 shares of Series A Fixed Rate Cumulative Preferred Stock of the Company at $100 per share and warrants to purchase 25,000 of the Company’s common stock at an exercise price of $8.00 per share; and ● $7,272,053 of the Note Balance was exchanged for 989,395 shares of Common Stock of the Company, representing an exchange price of $7.35 per share, which was the closing trading price of the Common Stock on June 26, 2018. Each of these stock issuances was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. Each of the investors in the Offering represented that it is an accredited investor within the meaning of Rule 501(a) of Regulation D and was acquiring the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by the Company or its representatives. The Company classified the Series A Preferred Stock as long-term debt because it contains an unconditional obligation requiring the Company to redeem the instruments at $100.00 per share on the Mandatory Redemption Date. The Warrants have been recorded as additional paid-in capital. On the issuance date, the Company allocated the proceeds between the Series A Preferred Stock and the Warrants based on the relative fair values of each. The aggregate values assigned upon issuance of each component were as follows (amounts in thousands except Price per Unit): Warrants (equity component) Mandatorily Redeemable Preferred Stock (debt component) Total Subscription Agreement: Price per Unit $ 108.75 $ 9,891.25 $ 10,000.00 Gross proceeds $ 87 $ 7,913 $ 8,000 Issuance costs - - - Net proceeds 87 7,913 8,000 Exchange Shares: 25 1,975 2,000 Total proceeds $ 112 $ 9,888 $ 10,000 Balance sheet impact at issuance: Long-term debt $ - $ 9,888 $ 9,888 Additional paid-in capital $ 112 $ - $ 112 The Company recorded interest expense relating to the Series A Preferred Stock of $78,000 during the thirteen and twenty-six weeks ending July 1, 2018.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jul. 01, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Note 10. Related Party Transactions The Company had open accounts with affiliated entities under the common control of FCCG resulting in net amounts due to the Company of $8,967,000 as of July 1, 2018. Beginning October 20, 2017, the receivable from FCCG bears interest at a rate of 10% per annum. During the thirteen and twenty-six weeks ended July 1, 2018, $248,000 and $481,000, respectively, of accrued interest income was added to the balance of the receivable from FCCG. Prior to the Offering, the Company’s operations were insignificant other than structuring the Offering. During this time, FCCG provided executive administration and accounting services for the Company. The Company reimbursed FCCG for out-of-pocket costs associated with these services, but there was no allocation of FCCG’s overhead costs. Effective with the Offering, the Company assumed all direct and indirect administrative functions relating to its business. During the twenty-six week period ending July 1, 2018, the Company recognized payables to FCCG in the amount of $204,000 for use of FCCG’s net operating losses for tax purposes (See Note 6).

Stock Based Incentive Plans

Stock Based Incentive Plans	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Stock Based Incentive Plans	Note 11. Stock based incentive plans Effective September 30, 2017, the Company adopted the 2017 Omnibus Equity Incentive Plan (the “Plan”). The Plan is a comprehensive incentive compensation plan under which the Company can grant equity-based and other incentive awards to officers, employees and directors of, and consultants and advisers to, FAT Brands Inc. and its subsidiaries. The Plan provides a maximum of 1,000,000 shares available for grant. During the twenty-six weeks ended July 1, 2018, the Company granted stock options to purchase 25,000 shares under the Plan to an employee, each with an exercise price equal to $12.00 per share and subject to a three-year vesting requirement, with one-third of the options vesting each year. Options that are not exercised will expire 10 years following the grant date. The weighted average fair value of the non-qualified stock options granted during the twenty-six weeks ended July 1, 2018 and the assumptions used in the Black-Scholes valuation model to record the stock-based compensation are as follows: Including Non-Employee Options Weighted average fair value per option granted $ 2.17 Expected dividend yield 4.00 % Expected volatility 31.73 % Risk-free interest rate 1.60% - 2.63 % Expected term (in years) 5.75 – 9.31 Weighted average exercise price per share $ 12.00 The Company’s stock option activity for the twenty-six weeks ended July 1, 2018 can be summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Stock options outstanding at December 31, 2017 362,500 $ 12.00 9.3 Grants 25,000 $ 12.00 9.7 Forfeited (5,000 ) $ 12.00 - Expired - $ - - Stock options outstanding at July 1, 2018 382,500 $ 12.00 9.4 Stock options exercisable at July 1, 2018 - The Company recognized share-based compensation expense in the amount of $120,000 and $245,000 during the thirteen and twenty-six weeks ended July 1, 2018, with a related tax benefit of approximately $32,000 and $66,000, respectively. There remains $495,000 of related share-based compensation relating to these non-vested grants, which will be recognized over the remaining vesting period, subject to future forfeitures. The Company does not have a specific policy regarding the source of shares to be delivered upon the exercise of stock options. As such, new shares may be issued or shares may be repurchased in the market. As of July 1, 2018, the Company did not expect to repurchase shares during the next fiscal year. In addition to the stock options listed above, the Company has issued the following outstanding warrants to purchase shares of its common stock: ● Warrants issued on October 20, 2017 to purchase 80,000 shares of the Company’s stock granted to the selling agent in the Company’s initial public offering (the “Common Stock Warrants”). The Common Stock Warrants are exercisable commencing April 20, 2018 through October 20, 2022. The exercise price for the Common Stock Warrants is $15 per share. The Common Stock Warrants provide that upon exercise, the Company may elect to redeem the Common Stock Warrants in cash by paying the difference between the applicable exercise price and the then-current fair market value of the common stock. At the time of the Offering, the Common Stock Warrants were valued at approximately $124,000, using the Black-Scholes model and the following assumptions: market price of shares: $12.00; risk free interest rate: 0.99%; expected volatility: 31.73%; expected dividend yield: 4%; and expected term: 5 years. ● Warrants issued on June 7, 2018 to purchase 100,000 shares of the Company’s common stock at $8.00 per share (the “Subscription Warrants”). The Subscription Warrants were issued as part of the Subscription Agreement (see Note 9). The Subscription Warrants may be exercised at any time or times beginning on the issue date and ending on the five year anniversary of the issue date. At the time of the Offering, the Subscription Warrants were valued at approximately $87,000, using the Black-Scholes model and the following assumptions: market price of shares: $7.24; risk free interest rate: 1.78%; expected volatility: 31.73%; expected dividend yield: 6.63%; and expected term: 5 years. ● Warrants issued on June 27, 2018 to purchase 25,000 shares of the Company’s common stock at $8.00 per share (the “Exchange Warrants”). The Exchange Warrants were issued as part of the Exchange (see Notes 8 and 9). The Exchange Warrants may be exercised at any time or times beginning on the issue date and ending on the five year anniversary of the issue date. At the time of the Exchange, the Exchange Warrants were valued at approximately $25,000, using the Black-Scholes model and the following assumptions: market price of shares: $7.51; risk free interest rate: 1.79%; expected volatility: 31.73%; expected dividend yield: 6.39%; and expected term: 5 years.

Dividends on Common Stock

Dividends on Common Stock	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Dividends on Common Stock	Note 12. DIVIDENDS ON COMMON STOCK The Company’s Board of Directors has declared the following quarterly dividends on common stock during the twenty-six weeks ending July 1, 2018: Declaration Date Record Date Payment Date Dividend Per Share Amount of Dividend February 8, 2018 March 30, 2018 April 16, 2018 $ 0.12 $ 1,200,000 June 27, 2018 July 6, 2018 July 16, 2018 $ 0.12 1,351,517 $ 2,551,517 On both dividend payment dates, FCCG elected to reinvest its dividend from its original 8,000,000 shares at the close of the IPO in newly issued common shares of the Company at the closing market price of the shares on the payment date. As a result, on April 16, 2018, the Company issued 153,600 shares of common stock to FCCG at a price of $6.25 per share in satisfaction of the $960,000 dividend payable. On July 16, 2018, the Company issued 157,765 shares of common stock to FCCG at a price of $6.085 per share in satisfaction of the $960,000 dividend payable. The issuance of these shares to FCCG was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated under Regulation D under the Securities Act as transactions by an issuer not involving a public offering. FCCG acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 01, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 13. Commitments and Contingencies Litigation Eric Rojany, et al. v. FAT Brands Inc., et al., Superior Court of California for the County of Los Angeles, Case No. BC708539. On June 7, 2018, Eric Rojany filed a complaint, personally and on behalf of all others similarly situated, against the Company, Andrew Wiederhorn, Ron Roe, Fog Cutter Capital Group, Inc., Tripoint Global Equities, LLC and members of the Company’s board of directors. The complaint alleges that the defendants are responsible for false and misleading statements and omitted material facts in connection with the Company’s initial public offering, which resulted in declines in the price of the Company’s common stock. The plaintiff stated that he intends to certify the complaint as a class action and is seeking compensatory damages in an amount to be determined at trial. The Company and other defendants dispute the allegations of the lawsuit and intend to vigorously defend against the claims. P&K Food Market, Inc. vs. Buffalo’s Franchise Concepts, Inc., Fog Cutter Capital Group, Shaun Curtis, Andy Wiederhorn et al., Superior Court of California for the County of Los Angeles, Case No. 18STLC09534. On July 13, 2018, P&K Food Market, Inc. (“P&K”) filed a complaint against Buffalo’s Franchise Concepts, Inc., Fog Cutter Capital Group, Shaun Curtis, and Andy Wiederhorn for Breach of Contract, Fraudulent Misrepresentation and Unlawful Offer and Sale of Franchise By Means of Untrue Statements or Omissions of Material Fact Under Cal. Corp. Code §§31201; 31202; 31300; and 31301. The case was filed in connection with the sale of an affiliate-owned “Buffalo’s Café” restaurant located in Palmdale, California. The lawsuit seeks general damages, special damages, punitive damages, restitution, interest, costs and attorneys’ fees and costs related to the alleged unlawful sale of the Palmdale restaurant. The franchisor and related parties intend to vigorously defend the allegations. The Company is obligated to indemnify its officers and directors to the extent permitted by applicable law in connection with these actions, and have insurance for such individuals, to the extent of the limits of the applicable insurance policies and subject to potential reservations of rights. The Company is also obligated to indemnify Tripoint Global Equities, LLC relating to the Rojany matter. These proceedings are in their early stages and the Company is unable to predict the ultimate outcome of either matter. There can be no assurance that the defendants will be successful in defending against this action. The Company is involved in other claims and legal proceedings from time-to-time that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of these actions will have a material adverse effect on its business, financial condition, results of operations, liquidity or capital resources. Operating Leases The Company leases corporate headquarters located in Beverly Hills, California comprising 5,478 square feet of space, pursuant to a lease that expires on April 30, 2020. We believe that all our existing facilities are in good operating condition and adequate to meet our current and foreseeable needs.

Geographic Information and Majo

Geographic Information and Major Franchisees	6 Months Ended
	Jul. 01, 2018
Geographic Information And Major Franchisees
Geographic Information and Major Franchisees	Note 14. geographic information AND MAJOR FRANCHISEES R Thirteen Weeks Ended July 1, 2018 Twenty-Six Weeks Ended July 1, 2018 United States $ 2,895 $ 5,643 Other countries 1,013 1,850 Total revenues $ 3,908 $ 7,493 Revenues are shown based on the geographic location of our licensee restaurants. All our assets are located in the United States. During the thirteen and twenty-six weeks ended July 1, 2018, no individual franchisee accounted for more than 10% of the Company’s revenues.

Operating Segments

Operating Segments	6 Months Ended
	Jul. 01, 2018
Segment Reporting [Abstract]
Operating Segments	NOTE 15 – OPERATING SEGMENTS Operating segments consist of (i) franchising operations conducted through Fatburger, (ii) franchising operations conducted through Buffalo’s and (iii) franchising operations conducted through Ponderosa. Each segment operates with its own management and personnel, with additional centralized support from the Company. The actual cost of the support provided by the Company is allocated to each operating segment. The following is a summary of each of the operating segments for the twenty-six weeks ended July 1, 2018 (dollars in thousands): Fatburger Buffalo’s Ponderosa Combined Revenues Royalties $ 2,631 $ 666 $ 2,135 $ 5,432 Franchise fees 669 9 20 698 Store opening fees 105 - - 105 Advertising fees 611 293 322 1,226 Management fees 32 - - 32 Total revenues 4,048 968 2,477 7,493 Expenses General and administrative 2,307 700 1,963 4,970 Income from operations 1,741 268 514 2,523 Other income (expense) 152 305 (52 ) 405 Income before income tax expense $ 1,893 $ 573 $ 462 $ 2,928 Reconciliation to consolidated net income (in thousands Twenty-Six Weeks Ended July 1, 2018 Combined segment net income before taxes $ 2,928 Corporate general and administrative expenses (755 ) Corporate other expense, net (995 ) Income tax expense (296 ) Net income $ 882

Subsequent Events

Subsequent Events	6 Months Ended
	Jul. 01, 2018
Subsequent Events [Abstract]
Subsequent Events	NOTE 16 – SUBSEQUENT EVENTS Acquisition of Hurricane Grill & Wings On July 3, 2018, the Company completed the acquisition of Hurricane AMT, LLC, a Florida limited liability company (“Hurricane”), for a purchase price of $12,500,000. Hurricane is the franchisor of Hurricane Grill & Wings and Hurricane BTW Restaurants. The purchase price of $12,500,000 was delivered through the payment of $8,000,000 in cash and the issuance to the Sellers of $4,500,000 of equity units of the Company valued at $10,000 per unit, or a total of 450 units. Each unit consists of (i) 100 shares of the Company’s newly designated Series A-1 Fixed Rate Cumulative Preferred Stock (the “Series A-1 Preferred Stock”) and (ii) a warrant to purchase 125 shares of the Company’s Common Stock at $8.00 per share (the “Hurricane Warrants”). The Company also entered into a Registration Rights Agreement with the Sellers under which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (“ SEC Holders of Series A-1 Preferred Stock will be entitled to receive cumulative dividends on the $100.00 per share stated liquidation preference of the Series A-1 Preferred Stock, in the amount of cash dividends at a rate of 6.0% per year. Upon (i) the five-year anniversary of the initial issuance date (July 3, 2023), or (ii) the earlier liquidation, dissolution or winding-up of the Company (the “Series A-1 Mandatory Redemption Date”), the holders of Series A-1 Preferred Stock will be entitled to cash redemption of their shares in an amount equal to $100.00 per share plus any accrued and unpaid dividends. In addition, prior to the Series A-1 Mandatory Redemption Date, the Company may optionally redeem the Series A-1 Preferred Stock, in whole or in part, at par plus any accrued and unpaid dividends. Holders of Series A-1 Preferred Stock may also optionally cause the Company to redeem all or any portion of their shares of Series A-1 Preferred Stock beginning any time after the two-year anniversary of the initial issuance date for an amount equal to $100.00 per share plus any accrued and unpaid dividends, which amount may be settled in cash or Common Stock of the Company, at the option of the holder. If a holder elects to receive Common Stock, shares will be issued as payment for redemption at the rate of $12.00 per share of Common Stock. Debt Facility On July 3, 2018, the Company as borrower, and certain of the Company’s direct and indirect subsidiaries and affiliates as guarantors, entered into a new Loan and Security Agreement (the “Loan Agreement”) with FB Lending, LLC (the “Lender”). Pursuant to the Loan Agreement, the Company borrowed $16.0 million in a term loan from the Lender. The Company used a portion of the loan proceeds to fund (i) the cash payment of $8.0 million to the members of Hurricane and closing costs in connection with the acquisition of Hurricane, and (ii) to repay borrowings of $2.0 million plus interest and fees owing under the Company’s existing loan facility with TCA Global Credit Master Fund, LP (See Note 7). The Company intends to use the remaining proceeds for additional acquisitions and general working capital purposes. The new term loan under the Loan Agreement matures on June 30, 2020. Interest on the term loan accrues at an annual fixed rate of 15.0%. The Company may prepay all or a portion of the outstanding principal and accrued unpaid interest under the Loan Agreement at any time upon prior notice to the Lender, subject to a prepayment penalty of 10% in the first year and 5% in the second year of the term loan. The Company is required to prepay all or a portion of the outstanding principal and accrued unpaid interest under the Loan Agreement in connection with certain dispositions of assets, extraordinary receipts, issuances of additional debt or equity, or a change of control of the Company. In connection with the Loan Agreement, the Company also issued to the Lender a warrant to purchase up to 499,000 shares of the Company’s Common Stock at $7.35 per share (the “Lender Warrant”). As security for its obligations under the Loan Agreement, the Company granted a lien on substantially all of its assets to the Lender. In addition, certain of the Company’s direct and indirect subsidiaries and affiliates entered into a Guaranty (the “Guaranty”) in favor of the Lender, pursuant to which they guaranteed the obligations of the Company under the Loan Agreement and granted as security for their guaranty obligations a lien on substantially all of their assets. The Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur other indebtedness, grant liens, merge or consolidate, dispose of assets, pay dividends or make distributions, in each case subject to customary exceptions. The Loan Agreement also includes customary events of default that include, among other things, non-payment, inaccuracy of representations and warranties, covenant breaches, events that result in a material adverse effect (as defined in the Loan Agreement), cross default to other material indebtedness, bankruptcy, insolvency and material judgments. The occurrence and continuance of an event of default could result in the acceleration of the Company’s obligations under the Loan Agreement and an increase in the interest rate by 5.0% per annum. Restaurant Openings and Closures Subsequent to July 1, 2018, franchisees have not opened or closed any additional franchise locations. Dividend Payable On July 16, 2018, FCCG elected to reinvest its dividend from its original 8,000,000 shares at the close of the IPO of $960,000 in newly issued common shares of the Company at $6.085 per share, the closing market price of the shares on that date. As a result, the Company issued 157,765 shares of common stock to FCCG in satisfaction of the dividend payable. The issuance of these shares to FCCG was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated under Regulation D under the Securities Act as transactions by an issuer not involving a public offering. FCCG acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. (See Note 12) Litigation Daniel Alden, et al. v. FAT Brands Inc., et al., Superior Court of California for the County of Los Angeles, Case No. BC716017. On August 2, 2018, Daniel Alden and others filed a complaint, personally and on behalf of all others similarly situated, against the Company, Andrew Wiederhorn, Ron Roe, Fog Cutter Capital Group, Inc., Tripoint Global Equities, LLC and members of the Company’s board of directors. The complaint alleges that the defendants are responsible for false and misleading statements and omitted material facts in connection with the Company’s initial public offering, which resulted in declines in the price of the Company’s common stock. The plaintiff stated that he intends to certify the complaint as a class action and is seeking compensatory damages in an amount to be determined at trial. The Company and other defendants dispute the allegations of the lawsuit and intend to vigorously defend against the claims. The Company is obligated to indemnify its officers and directors to the extent permitted by applicable law in connection with this action, and has insurance for such individuals, to the extent of the limits of the applicable insurance policies and subject to potential reservations of rights. The Company is also obligated to indemnify Tripoint Global Equities, LLC relating to this matter. These proceedings are in their early stages and the Company is unable to predict the ultimate outcome of either matter. There can be no assurance that the defendants will be successful in defending against this action.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Nature of Operations	Nature of operations Fatburger restaurants serve a variety of freshly made-to-order Fatburgers, Turkeyburgers, Chicken Sandwiches, Veggieburgers, French fries, onion rings, soft-drinks and milkshakes. Buffalo’s grants franchises for the operation of casual dining restaurants (Buffalo’s Southwest Cafés) and quick service restaurants outlets (Buffalo’s Express). These restaurants specialize in the sale of Buffalo-Style chicken wings, chicken tenders, burgers, ribs, wrap sandwiches, and salads. Ponderosa and Bonanza Steakhouses offer guests a high-quality buffet and broad array of great tasting, affordably-priced steak, chicken and seafood entrées. Buffets at Ponderosa and Bonanza Steakhouses feature a large variety of all you can eat salads, soups, appetizers, vegetables, breads, hot main courses and desserts. Bonanza Steak & BBQ operates full service steakhouses with fresh farm-to-table salad bar, including a menu showcase of USDA flame-grilled steaks, house-smoked BBQ and contemporized interpretations of traditional American classics. The Company also co-brands its franchise concepts. These co-branded restaurants sell products of multiple affiliated brands and share back-of-the-house facilities. The Company operates on a 52-week calendar and its fiscal year ends on the Sunday closest to December 31. Consistent with the industry practice, the Company measures its stores’ performance based upon 7-day work weeks. Using the 52-week cycle ensures consistent weekly reporting for operations and ensures that each week has the same days, since certain days are more profitable than others. The use of this fiscal year means a 53 rd
Principles of Consolidation	Principles of consolidation
Use of Estimates in the Preparation of the Consolidated Financial Statements	Use of estimates in the preparation of the consolidated financial statements
Franchise Fees snd Royalty Revenue	Franchise fees and royalty revenue
Store Opening Fees	Store opening fees –
Advertising	Advertising –
Goodwill and Other Intangible Assets	Goodwill and other intangible assets
Accounts Receivable	Accounts receivable
Trade Notes Receivable	Trade notes receivable – Trade
Share-based Compensation	Share-based compensation
Income Taxes	Income taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. We utilize a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon the ultimate settlement.
Earnings Per Share	Earnings per share
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue From Contracts With Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated standard replaces most existing revenue recognition guidance in U.S. GAAP. These standards became effective for the Company on January 1, 2018. These standards require that the transaction price received from customers be allocated to each separate and distinct performance obligation. The transaction price attributable to each separate and distinct performance obligation is then recognized as the performance obligations are satisfied as specified in the contract. The agreements for services provided by the Company related to upfront fees received from franchisees (such as initial or renewal fees) do not currently contain separate and distinct performance obligations from the franchise right and thus those upfront fees will be recognized as revenue over the term of each respective franchise agreement. Previously, we recognized upfront franchise fees such as initial and renewal fees when the related services have been provided, which is when a store opened for initial fees and when renewal options became effective for renewal fees. These standards require any unamortized portion of fees received prior to adoption be presented in the consolidated balance sheet as a contract liability. The new standards also had an impact on transactions previously not included in the Company’s revenues and expenses such as franchisee contributions to and subsequent expenditures from advertising arrangements we have with our franchisees. The Company did not previously include these contributions and expenditures in its consolidated statements of operations or cash flows. Under the new standards, the Company will recognize advertising fees and the related expense in its consolidated statements of operations or cash flows. The Company will also consolidate the assets and liabilities related to advertising funds on its balance sheet. These standards will not impact the recognition of our sales-based royalties from franchisees, which is generally our largest source of revenue. We have implemented internal controls related to the recognition and presentation of the Company’s revenues under these new standards. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method, in which the cumulative effect of applying the standard would be recognized at the date of initial application. An adjustment to increase deferred revenue in the amount of $3,482,000 was established on the date of adoption relating to fees received through December 31, 2017 that would have been deferred and recognized over the term of each respective franchise store agreement if the new guidance had been applied in the past. A deferred tax asset of $810,000 related to this contract liability was also established on the date of adoption. These adjustments had the effect of increasing beginning accumulated deficit by approximately $2,672,000. Adopting the new accounting standards for revenue affected several financial statement line items for the twenty-six weeks ended July 1, 2018. The following tables provide the affected amounts as reported in these Unaudited Consolidated Financial Statements compared with what they would have been if the previous accounting guidance had remained in effect. As of July 1, 2018 (in thousands) Amounts As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Balance Sheet: Accounts receivable $ 1,308 $ 1,231 Due from affiliates $ 8,967 $ 8,493 Deferred income taxes $ 1,815 $ 1,003 Buffalo’s Creative and Advertising Fund $ - $ 330 Buffalo’s Creative and Advertising Fund - Contra $ - $ 330 Accounts payable $ 2,404 $ 2,081 Deferred income $ 6,907 $ 3,790 Accrued expenses $ 1,487 $ 1,476 Accrued advertising $ 761 $ 545 Accumulated deficit $ (2,403 ) $ (97 ) For the twenty-six weeks ended July 1, 2018 (in thousands except per share data) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Operations: Franchise fees $ 698 $ 331 Advertising fees $ 1,226 $ - Advertising expense $ 1,226 $ - Net income $ 882 $ 516 Earnings per common share - basic $ 0.09 $ 0.05 Earnings per common share - diluted $ 0.09 $ 0.05 For the twenty-six weeks ended July 1, 2018 (in thousands) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Cash Flows: Net income $ 882 $ 516 Adjustments to reconcile net income to net cash provided by operating activities: Accounts receivable $ (264 ) $ (313 ) Deferred income $ (290 ) 77 Accounts payable and accrued expenses $ (410 ) $ (643 ) Accrued advertising $ (176 ) $ 197 Increase in due from affiliates $ (218 ) $ (530 ) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment, which simplifies the accounting for goodwill impairment. This ASU removes Step 2 of the goodwill impairment test, which requires hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The new guidance also requires disclosure of the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 is effective for the Company beginning January 1, 2020. We elected to early adopt this standard when performing our annual goodwill impairment test in 2017. The adoption of this ASU did not have a significant financial impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. This standard provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The amendments in this ASU are effective beginning January 1, 2018, with early adoption permitted. This ASU is to be applied prospectively on and after the effective date. We adopted this ASU during 2017. The adoption of this ASU did not have a significant financial impact on our consolidated financial statements.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. This ASU is effective for interim and annual period beginning after December 15, 2018 and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements, with certain practical expedients available. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU No.2018-07, Compensation- Stock Compensation (Topic 718). Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to this update, Top 718 applied only to share-based transactions to employees. Consistent with the accounting requirements for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The amendments in the update are effective for public business entities form fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of this accounting standard is not expected to have a material effect on the Company’s consolidated financial statements.

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Schedule of Affected Amounts Reported in Financial Statements	The following tables provide the affected amounts as reported in these Unaudited Consolidated Financial Statements compared with what they would have been if the previous accounting guidance had remained in effect. As of July 1, 2018 (in thousands) Amounts As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Balance Sheet: Accounts receivable $ 1,308 $ 1,231 Due from affiliates $ 8,967 $ 8,493 Deferred income taxes $ 1,815 $ 1,003 Buffalo’s Creative and Advertising Fund $ - $ 330 Buffalo’s Creative and Advertising Fund - Contra $ - $ 330 Accounts payable $ 2,404 $ 2,081 Deferred income $ 6,907 $ 3,790 Accrued expenses $ 1,487 $ 1,476 Accrued advertising $ 761 $ 545 Accumulated deficit $ (2,403 ) $ (97 ) For the twenty-six weeks ended July 1, 2018 (in thousands except per share data) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Operations: Franchise fees $ 698 $ 331 Advertising fees $ 1,226 $ - Advertising expense $ 1,226 $ - Net income $ 882 $ 516 Earnings per common share - basic $ 0.09 $ 0.05 Earnings per common share - diluted $ 0.09 $ 0.05 For the twenty-six weeks ended July 1, 2018 (in thousands) As Reported Amounts Under Previous Accounting Guidance Unaudited Consolidated Statement of Cash Flows: Net income $ 882 $ 516 Adjustments to reconcile net income to net cash provided by operating activities: Accounts receivable $ (264 ) $ (313 ) Deferred income $ (290 ) 77 Accounts payable and accrued expenses $ (410 ) $ (643 ) Accrued advertising $ (176 ) $ 197 Increase in due from affiliates $ (218 ) $ (530 )

Goodwill (Tables)

Goodwill (Tables)	6 Months Ended
	Jul. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	Goodwill consists of the following (in thousands): July 1, 2018 December 31, 2017 Goodwill: Fatburger $ 529 $ 529 Buffalo’s 5,365 5,365 Ponderosa 1,462 1,462 Total goodwill $ 7,356 $ 7,356

Other Intangible Assets (Tables

Other Intangible Assets (Tables)	6 Months Ended
	Jul. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Intangible assets consist of the following (in thousands): July 1, 2018 December 31, 2017 Trademarks: Fatburger $ 2,135 $ 2,135 Buffalo’s 27 27 Ponderosa 7,230 7,230 Total trademarks 9,392 9,392 Franchise agreements: Ponderosa – cost 1,640 1,640 Ponderosa – accumulated amortization (77 ) (21 ) Total franchise agreements 1,563 1,619 Total $ 10,955 $ 11,011
Schedule of Future Amortization	The expected future amortization of the Company’s capitalized franchise agreements is as follows (in thousands): Fiscal year: 2018 $ 55 2019 110 2020 110 2021 110 2022 110 Thereafter 1,068 Total $ 1,563

Deferred Income (Tables)

Deferred Income (Tables)	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Schedule of Deferred Income	Deferred income is as follows: July 1, 2018 December 31, 2017 Deferred franchise fees $ 6,122 $ 2,781 Deferred royalties 785 932 Total $ 6,907 $ 3,713

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Schedule of Components of Deferred Tax Assets and Liabilities	Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): July 1, 2018 December 31, 2017 Deferred tax assets (liabilities) Deferred income $ 1,801 $ 882 Reserves and accruals 456 451 Intangibles (416 ) (372 ) Deferred state income tax (51 ) (25 ) Loss carryforward 25 1 Total $ 1,815 $ 937
Schedule of Components of the Income Tax Provision (Benefit)	Components of the income tax provision are as follows (in thousands): Twenty-Six Weeks Ended July 1, 2018 Current Federal $ 204 State 49 Foreign 109 362 Deferred Federal (46 ) State (20 ) (66 ) Total income tax provision $ 296
Schedule of Pretax Loss	Income tax provision related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax income as follows (in thousands): Twenty-Six Weeks Ended July 1, 2018 Tax provision at statutory rate 21 % State and local income taxes 2 % Other 2 % Total income tax provision 25 %

Mandatorily Redeemable Prefer29

Mandatorily Redeemable Preferred Stock (Tables)	6 Months Ended
	Jul. 01, 2018
Mandatorily Redeemable Preferred Stock
Schedule of Mandatorily Redeemable Preferred Stock	The aggregate values assigned upon issuance of each component were as follows (amounts in thousands except Price per Unit): Warrants (equity component) Mandatorily Redeemable Preferred Stock (debt component) Total Subscription Agreement: Price per Unit $ 108.75 $ 9,891.25 $ 10,000.00 Gross proceeds $ 87 $ 7,913 $ 8,000 Issuance costs - - - Net proceeds 87 7,913 8,000 Exchange Shares: 25 1,975 2,000 Total proceeds $ 112 $ 9,888 $ 10,000 Balance sheet impact at issuance: Long-term debt $ - $ 9,888 $ 9,888 Additional paid-in capital $ 112 $ - $ 112

Stock Based Incentive Plans (Ta

Stock Based Incentive Plans (Tables)	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Schedule of Assumptions Used for Stock-based Compensation	The weighted average fair value of the non-qualified stock options granted during the twenty-six weeks ended July 1, 2018 and the assumptions used in the Black-Scholes valuation model to record the stock-based compensation are as follows: Including Non-Employee Options Weighted average fair value per option granted $ 2.17 Expected dividend yield 4.00 % Expected volatility 31.73 % Risk-free interest rate 1.60% - 2.63 % Expected term (in years) 5.75 – 9.31 Weighted average exercise price per share $ 12.00
Schedule of Stock Option Activity	The Company’s stock option activity for the twenty-six weeks ended July 1, 2018 can be summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Stock options outstanding at December 31, 2017 362,500 $ 12.00 9.3 Grants 25,000 $ 12.00 9.7 Forfeited (5,000 ) $ 12.00 - Expired - $ - - Stock options outstanding at July 1, 2018 382,500 $ 12.00 9.4 Stock options exercisable at July 1, 2018 -

Dividends on Common Stock (Tabl

Dividends on Common Stock (Tables)	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Schedule of Quarterly Dividends	The Company’s Board of Directors has declared the following quarterly dividends on common stock during the twenty-six weeks ending July 1, 2018: Declaration Date Record Date Payment Date Dividend Per Share Amount of Dividend February 8, 2018 March 30, 2018 April 16, 2018 $ 0.12 $ 1,200,000 June 27, 2018 July 6, 2018 July 16, 2018 $ 0.12 1,351,517 $ 2,551,517

Geographic Information and Ma32

Geographic Information and Major Franchisees (Tables)	6 Months Ended
	Jul. 01, 2018
Geographic Information And Major Franchisees
Schedule of Revenues by Geographic Area	R Thirteen Weeks Ended July 1, 2018 Twenty-Six Weeks Ended July 1, 2018 United States $ 2,895 $ 5,643 Other countries 1,013 1,850 Total revenues $ 3,908 $ 7,493

Operating Segments (Tables)

Operating Segments (Tables)	6 Months Ended
	Jul. 01, 2018
Segment Reporting [Abstract]
Schedule of Operating Segments	The following is a summary of each of the operating segments for the twenty-six weeks ended July 1, 2018 (dollars in thousands): Fatburger Buffalo’s Ponderosa Combined Revenues Royalties $ 2,631 $ 666 $ 2,135 $ 5,432 Franchise fees 669 9 20 698 Store opening fees 105 - - 105 Advertising fees 611 293 322 1,226 Management fees 32 - - 32 Total revenues 4,048 968 2,477 7,493 Expenses General and administrative 2,307 700 1,963 4,970 Income from operations 1,741 268 514 2,523 Other income (expense) 152 305 (52 ) 405 Income before income tax expense $ 1,893 $ 573 $ 462 $ 2,928
Schedule of Reconciliation to Consolidated Net Income	Reconciliation to consolidated net income (in thousands Twenty-Six Weeks Ended July 1, 2018 Combined segment net income before taxes $ 2,928 Corporate general and administrative expenses (755 ) Corporate other expense, net (995 ) Income tax expense (296 ) Net income $ 882

Organization and Relationships

Organization and Relationships (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2018	Oct. 20, 2017
Equity ownership percentage		20.00%
Proceeds from public offering	$ 8,000
Fog Cutter Capital Group Inc [Member]
Exchange of note payable related party	30,000
Fog Cutter Capital Group Inc [Member] | Homestyle Dining LLC [Member]
Proceeds from public offering	$ 10,550

Summary of Significant Accoun35

Summary of Significant Accounting Policies (Details Narrative) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018USD ($)	Jul. 01, 2018USD ($)
Store opening fees	$ 105	$ 105
Income tax likely being realized		50.00%
Adjustment to increase deferred revenue		$ 3,482
Deferred tax asset on contract liability		810
Cumulative adjustments in accumulated deficit		2,672
Domestic Stores [Member]
Store opening fees		45
International Stores [Member]
Store opening fees		$ 60
Minimum [Member]
Royalty fee percentage	0.75%	0.75%
Interest rate percentage	6.00%	6.00%
Maximum [Member]
Royalty fee percentage	6.00%	6.00%
Interest rate percentage	7.50%	7.50%

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Schedule of Affected Amounts Reported in Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018	Dec. 31, 2017
Accounts receivable	$ 1,308	$ 1,308	$ 918
Due from affiliates	8,967	8,967	7,963
Deferred income taxes	1,815	1,815	937
Buffalo's Creative and Advertising Fund			436
Buffalo's Creative and Advertising Fund - Contra			436
Accounts payable	2,404	2,404	2,439
Deferred income	1,162	1,162	1,772
Accrued expenses	1,487	1,487	1,761
Accrued advertising	761	761	348
Accumulated deficit (retained earnings)	(2,403)	(2,403)	$ (613)
Franchise fees	299	698
Advertising fees	630	1,226
Advertising expense		1,226
Net income	$ 373	$ 882
Earnings per common share - basic	$ 0.04	$ 0.09
Earnings per common share - diluted	$ 0.04	$ 0.09
Accounts receivable		$ (264)
Deferred income		(290)
Accounts payable and accrued expenses		(410)
Accrued advertising		(176)
Increase in due from affiliates		(218)
Amounts Under Previous Accounting Guidance [Member]
Accounts receivable	$ 1,231	1,231
Due from affiliates	8,493	8,493
Deferred income taxes	1,003	1,003
Buffalo's Creative and Advertising Fund	330	330
Buffalo's Creative and Advertising Fund - Contra	330	330
Accounts payable	2,081	2,081
Deferred income	3,790	3,790
Accrued expenses	1,476	1,476
Accrued advertising	545	545
Accumulated deficit (retained earnings)	$ (97)	(97)
Franchise fees		331
Advertising fees
Advertising expense
Net income		$ 516
Earnings per common share - basic		$ 0.05
Earnings per common share - diluted		$ 0.05
Accounts receivable		$ (313)
Deferred income		77
Accounts payable and accrued expenses		(643)
Accrued advertising		197
Increase in due from affiliates		$ (530)

Goodwill - Schedule of Goodwill

Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Total goodwill	$ 7,356	$ 7,356
Fatburger [Member}
Total goodwill	529	529
Buffalo's [Member}
Total goodwill	5,365	5,365
Ponderosa [Member]
Total goodwill	$ 1,462	$ 1,462

Other Intangible Assets - Sched

Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Total trademarks	$ 9,392	$ 9,392
Total franchise agreements	1,563	1,619
Total	10,955	11,011
Fatburger [Member}
Total trademarks	2,135	2,135
Buffalo's [Member}
Total trademarks	27	27
Ponderosa [Member]
Total trademarks	7,230	7,230
Ponderosa [Member] | Franchise Agreements [Member]
Cost	1,640	1,640
Accumulated amortization	$ (77)	$ (21)

Other Intangible Assets - Sch39

Other Intangible Assets - Schedule of Future Amortization (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
2,018	$ 55
2,019	110
2,020	110
2,021	110
2,022	110
Thereafter	1,068
Total	$ 1,563	$ 1,619

Deferred Income - Schedule of D

Deferred Income - Schedule of Deferred Income (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Deferred franchise fees	$ 6,122	$ 2,781
Deferred royalties	785	932
Total	$ 6,907	$ 3,713

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - FCCG [Member] $ in Thousands	Jul. 01, 2018USD ($)
Due from related party	$ 8,967
Taxes payable	$ 204

Income Taxes - Schedule of Comp

Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Deferred income	$ 1,801	$ 882
Reserves and accruals	456	451
Intangibles	(416)	(372)
Deferred state income tax	(51)	(25)
Loss carryforward	25	1
Total	$ 1,815	$ 937

Income Taxes - Schedule of Co43

Income Taxes - Schedule of Components of the Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Current: Federal		$ 204
Current: State		49
Current: Foreign		109
Current Income Tax Expense (Benefit), Total		362
Deferred: Federal		(46)
Deferred: State		(20)
Deferred: Income Tax Expense (Benefit), Total		(66)
Total income tax provision	$ 112	$ 296

Income Taxes - Schedule of Pret

Income Taxes - Schedule of Pretax Loss (Details)	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Tax provision at statutory rate	21.00%
State and local income taxes	2.00%
Other	2.00%
Total income tax provision	25.00%

Income Taxes - Schedule of Pr45

Income Taxes - Schedule of Pretax Loss (Details) (Parenthetical)	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Statutory income tax rate	21.00%

Senior Secured Redeemable Deb46

Senior Secured Redeemable Debentures (Details Narrative) - USD ($) $ in Thousands	Apr. 27, 2018	Jul. 01, 2018	Jul. 01, 2018
Interest expense		$ 222	$ 436
Securities Purchase Agreement [Member]
Interest expense		$ 63	$ 63
TCA Global Credit Master Fund, LP [Member]
Line of credit	$ 5,000
Proceeds from issuance of debt	$ 2,000
Debt maturity date	Oct. 27, 2019
Debt interest rate	15.00%
Commitment fees, rate	2.00%
TCA Global Credit Master Fund, LP [Member] | Banking [Member]
Payment for investment banking fee	$ 170

Note Payable to FCCG (Details N

Note Payable to FCCG (Details Narrative) - USD ($)	Jun. 27, 2018	Jun. 26, 2018	Oct. 20, 2017	Jul. 01, 2018	Jul. 01, 2018	Jun. 07, 2018
Notes payable, balance		$ 10,222,000
Number of warrants to purchase common stock	25,000		80,000			100,000
Warrants exercise price	$ 8		$ 15			$ 8
Note Exchange Agreement [Member]
Debt principal balance			$ 30,000,000
Related party debt balance amount converted	$ 2,000,000	$ 7,272,053
Number of warrants to purchase common stock	25,000
Warrants exercise price	$ 8
Note Exchange Agreement [Member] | Common Stock [Member]
Number of shares converted		989,395
Conversion price per share		$ 7.35
Note Exchange Agreement [Member] | Series A Fixed Rate Cumulative Preferred Stock [Member]
Number of shares converted	20,000
Conversion price per share	$ 100
Fatburger And Buffalo [Member] | Unsecured Promissory Note [Member]
Debt principal balance			$ 30,000,000
Debt interest rate			10.00%
Maturity term			5 years
FCCG [Member]
Debt interest rate			10.00%
Repayments of notes payable		$ 19,778,000
FCCG [Member] | Note Exchange Agreement [Member]
Number of warrants to purchase common stock	25,000
Warrants exercise price	$ 8
Fog Cutter Capital Group Inc [Member]
Related party debt balance amount converted	$ 950,000
Interest expense				$ 412,000	$ 864,000
Fog Cutter Capital Group Inc [Member] | Note Exchange Agreement [Member]
Related party debt balance amount converted	$ 9,272,053

Mandatorily Redeemable Prefer48

Mandatorily Redeemable Preferred Stock (Details Narrative) - USD ($)	Jun. 27, 2018	Jun. 27, 2018	Jun. 26, 2018	Jun. 08, 2018	Jun. 07, 2018	Jul. 01, 2018	Jul. 01, 2018	Oct. 20, 2017
Warrants issued to purchase shares	25,000	25,000			100,000			80,000
Warrants exercise price	$ 8	$ 8			$ 8			$ 15
Proceeds from initial offering							$ 8,000,000
Fog Cutter Capital Group Inc [Member]
Related party debt balance amount converted		$ 950,000
Interest expense						$ 412,000	864,000
Warrant [Member]
Proceeds from initial offering							87,000
Subscription Agreement [Member]
Sale of units in transactions					800
Sales price of shares issuance and sale					$ 10,000
Proceeds from initial offering					$ 8,000,000
Subscription Agreement [Member] | Warrant [Member]
Warrants issued to purchase shares					125
Warrants exercise price					$ 8
Note Exchange Agreement [Member]
Warrants issued to purchase shares	25,000	25,000
Warrants exercise price	$ 8	$ 8
Debt instrument, principal amount								$ 30,000,000
Accrued interest								$ 10,222,000
Related party debt balance amount converted		$ 2,000,000	$ 7,272,053
Note Exchange Agreement [Member] | Fog Cutter Capital Group Inc [Member]
Related party debt balance amount converted		$ 9,272,053
Note Exchange Agreement [Member] | Common Stock [Member]
Number of shares converted			989,395
Conversion price per share			$ 7.35
Series A Preferred Stock [Member]
Number of shares designated				100,000
Liquidation preference shares				$ 100
Cash dividend rate				9.90%
Deferred dividend rate				4.00%
Cash redemption price per share				$ 100
Interest expense						$ 78,000	$ 78,000
Series A Preferred Stock [Member] | On Or Prior to June 30, 2021 [Member]
Cash redemption price per share						$ 115	$ 115
Series A Preferred Stock [Member] | After June 30, 2021 and On Or Prior to June 30, 2022 [Member]
Cash redemption price per share						110	110
Series A Preferred Stock [Member] | After June 30, 2022 [Member]
Cash redemption price per share						$ 100	$ 100
Series A Fixed Rate Cumulative Preferred Stock [Member] | Subscription Agreement [Member]
Number of preferred stock designated					100
Series A Fixed Rate Cumulative Preferred Stock [Member] | Note Exchange Agreement [Member]
Number of shares converted		20,000
Conversion price per share	$ 100	$ 100
Exchange Shares [Member] | Note Exchange Agreement [Member]
Related party debt balance amount converted	$ 7,272,053
Exchange Shares [Member] | Note Exchange Agreement [Member] | Common Stock [Member]
Number of shares converted	989,395
Conversion price per share	$ 7.35	$ 7.35

Mandatorily Redeemable Prefer49

Mandatorily Redeemable Preferred Stock - Schedule of Mandatorily Redeemable Preferred Stock (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jul. 01, 2018USD ($)$ / shares
Price per Unit | $ / shares	$ 10,000
Gross proceeds	$ 8,000
Issuance costs
Net proceeds	8,000
Exchange Shares	2,000
Total proceeds	10,000
Long-term debt	9,888
Additional paid-in capital	$ 112
Mandatorily Redeemable Preferred Stock [Member]
Price per Unit | $ / shares	$ 9,891.25
Gross proceeds	$ 7,913
Issuance costs
Net proceeds	7,913
Exchange Shares	1,975
Total proceeds	9,888
Long-term debt	9,888
Additional paid-in capital
Warrant [Member]
Price per Unit | $ / shares	$ 108.75
Gross proceeds	$ 87
Issuance costs
Net proceeds	87
Exchange Shares	25
Total proceeds	112
Long-term debt
Additional paid-in capital	$ 112

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - FCCG [Member] - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018	Oct. 20, 2017
Due to related party	$ 8,967	$ 8,967
Debt interest rate			10.00%
Accrued interest income receivable	248	481
Taxes payable	$ 204	$ 204

Stock Based Incentive Plans (De

Stock Based Incentive Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Jun. 27, 2018	Jun. 07, 2018	Oct. 20, 2017	Jul. 01, 2018	Jul. 01, 2018	Jun. 07, 2018
Options, exercise price					$ 12
Stock based compensation expense				$ 120	$ 245
Related tax benefit				$ 32	66
Stock based compensation to non-vested grants					$ 495
Warrants issued to purchase share	25,000	100,000	80,000			100,000
Warrant exercisable period, description			April 20, 2018 through October 20, 2022
Warrants exercise price	$ 8	$ 8	$ 15			$ 8
Warrants value	$ 25	$ 87	$ 124
Common Stock Warrants [Member]
Market price of shares			$ 12
Risk-free interest rate			0.99%
Expected volatility			31.73%
Expected dividend yield			4.00%
Expected term (in years)			5 years
Subscription Warrants [Member]
Market price of shares		$ 7.24				$ 7.24
Risk-free interest rate						1.78%
Expected volatility						31.73%
Expected dividend yield						6.63%
Expected term (in years)						5 years
Exchange Warrants [Member]
Market price of shares	$ 7.51
Risk-free interest rate	1.79%
Expected volatility	31.73%
Expected dividend yield	6.391%
Expected term (in years)	5 years
2017 Omnibus Equity Incentive Plan [Member] | Employees [Member]
Options granted to purchase shares					25,000
Options, exercise price					$ 12
Stock option vesting period					3 years
Stock option, description					Subject to a three-year vesting requirement, with one-third of the options vesting each year.
Non exercised options expiration term					10 years
2017 Omnibus Equity Incentive Plan [Member] | Maximum [Member]
Number of shares available for grant				1,000,000	1,000,000

Stock Based Incentive Plans - S

Stock Based Incentive Plans - Schedule of Assumptions Used for Stock-based Compensation (Details)	6 Months Ended
	Jul. 01, 2018$ / shares
Weighted average exercise price per share	$ 12
Including Non-Employee Option [Member]
Weighted average fair value per option granted	$ 2.17
Expected dividend yield	4.00%
Expected volatility	31.73%
Weighted average exercise price per share	$ 12
Including Non-Employee Option [Member] | Minimum [Member]
Risk-free interest rate	1.60%
Expected term (in years)	5 years 9 months
Including Non-Employee Option [Member] | Maximum [Member]
Risk-free interest rate	2.63%
Expected term (in years)	9 years 3 months 22 days

Stock Based Incentive Plans -53

Stock Based Incentive Plans - Schedule of Stock Option Activity (Details)	6 Months Ended
	Jul. 01, 2018$ / sharesshares
Equity [Abstract]
Number of Shares, Stock options outstanding, beginning balance	362,500
Number of Shares, Grants	25,000
Number of Shares, Forfeited	(5,000)
Number of Shares, Expired
Number of Shares, Stock options outstanding, ending balance	382,500
Number of Shares, Stock options exercisable, ending balance
Weighted Average Exercise Price, Stock options outstanding, beginning balance | $ / shares	$ 12
Weighted Average Exercise Price, Grants | $ / shares	12
Weighted Average Exercise Price, Forfeited | $ / shares	12
Weighted Average Exercise Price, Stock options outstanding, ending balance | $ / shares	$ 12
Weighted Average Remaining Contractual Life (Years), Stock options outstanding, beginning balance	9 years 3 months 19 days
Weighted Average Remaining Contractual Life (Years), Grants	9 years 8 months 12 days
Weighted Average Remaining Contractual Life (Years), Stock options outstanding, ending balance	9 years 4 months 24 days

Dividends on Common Stock (Deta

Dividends on Common Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Apr. 16, 2018	Jul. 01, 2018	Dec. 31, 2017
Shares issued price per share		$ 10,000
Dividend payable		$ 1,352
Fog Cutter Capital Group Inc [Member]
Dividend reinvest on share		8,000,000
Number of common stock share issued	153,600
Shares issued price per share	$ 6.25
Dividend payable	$ 960
Fog Cutter Capital Group Inc [Member] | July 16, 2018 [Member]
Number of common stock share issued		157,765
Shares issued price per share		$ 6.085
Dividend payable		$ 960

Dividends on Common Stock - Sch

Dividends on Common Stock - Schedule of Quarterly Dividends (Details)	Jul. 01, 2018USD ($)$ / shares
Amount of dividend	$ 2,551,517
February 8, 2018 [Member]
Dividend per share | $ / shares	$ 0.12
Amount of dividend	$ 1,200,000
June 27, 2018 [Member]
Dividend per share | $ / shares	$ 0.12
Amount of dividend	$ 1,351,517

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative)	6 Months Ended
	Jul. 01, 2018ft²
Operating lease expiration date	Apr. 30, 2020
Beverly Hills, California [Member]
Square feet of space	5,478

Geographic Information and Ma57

Geographic Information and Major Franchisees (Details Narrative)	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Geographic Information And Major Franchisees
Franchise revenue percentage description	No individual franchisee accounted for more than 10% of the Company’s revenues.	No individual franchisee accounted for more than 10% of the Company’s revenues.

Geographic Information and Ma58

Geographic Information and Major Franchisees - Schedule of Revenues by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Total Revenue	$ 3,908	$ 7,493
United States [Member]
Total Revenue	2,895	5,643
Other Countries [Member]
Total Revenue	$ 1,013	$ 1,850

Operating Segments - Schedule o

Operating Segments - Schedule of Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Royalties Revenues	$ 2,860	$ 5,432
Franchise fees Revenue	299	698
Store opening fees	105	105
Advertising fees Revenue	630	1,226
Management fees Revenues	14	32
Total revenue	3,908	7,493
General and administrative Expenses	3,081	5,725
Income from operations	827	1,768
Other income (expense)	$ (2)	(3)
Income before income tax expense		2,928
Fatburger [Member}
Royalties Revenues		2,631
Franchise fees Revenue		669
Store opening fees		105
Advertising fees Revenue		611
Management fees Revenues		32
Total revenue		4,048
General and administrative Expenses		2,307
Income from operations		1,741
Other income (expense)		152
Income before income tax expense		1,893
Buffalo's [Member}
Royalties Revenues		666
Franchise fees Revenue		9
Store opening fees
Advertising fees Revenue		293
Management fees Revenues
Total revenue		968
General and administrative Expenses		700
Income from operations		268
Other income (expense)		305
Income before income tax expense		573
Ponderosa [Member]
Royalties Revenues		2,135
Franchise fees Revenue		20
Store opening fees
Advertising fees Revenue		322
Management fees Revenues
Total revenue		2,477
General and administrative Expenses		1,963
Income from operations		514
Other income (expense)		(52)
Income before income tax expense		$ 462

Operating Segments - Schedule60

Operating Segments - Schedule of Reconciliation to Consolidated Net Income (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2018	Jul. 01, 2018
Segment Reporting [Abstract]
Combined segment net income before taxes		$ 2,928
Corporate general and administrative expenses		(755)
Corporate other expense, net		(995)
Income tax expense	$ (112)	(296)
Net income	$ 373	$ 882

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Jul. 16, 2018	Jul. 03, 2018	Apr. 27, 2018	Apr. 16, 2018	Jul. 01, 2018	Jun. 27, 2018	Jun. 07, 2018	Oct. 20, 2017
Number of warrants to purchase common stock						25,000	100,000	80,000
Exercise price per share						$ 8	$ 8	$ 15
Repayment of borrowings					$ 7,903
Shares issued price per unit					$ 10,000
TCA Global Credit Master Fund, LP [Member]
Loan maturity date			Oct. 27, 2019
Interest rate			15.00%
Fog Cutter Capital Group Inc [Member]
Shares issued price per unit				$ 6.25
Dividend reinvest on share					8,000,000
Number of common stock share issued				153,600
Subsequent Event [Member] | First Year [Member]
Prepayment penalty percentage		10.00%
Subsequent Event [Member] | Second Year [Member]
Prepayment penalty percentage		5.00%
Subsequent Event [Member] | Members of Hurricane [Member]
Repayment of borrowings		$ 8,000
Subsequent Event [Member] | Loan and Security Agreement [Member]
Term loan borrowings		$ 16,000
Loan maturity date		Jun. 30, 2020
Interest rate		15.00%
Subsequent Event [Member] | Loan Agreement [Member]
Number of warrants to purchase common stock		499,000
Exercise price per share		$ 7.35
Subsequent Event [Member] | Loan Agreement [Member] | Maximum [Member]
Interest rate		5.00%
Subsequent Event [Member] | Series A-1 Preferred Stock [Member]
Preferred stock stated liquidation preference per share		$ 100
Preferred stock, dividend rate, percentage		6.00%
Preferred stock, redemption per share		$ 100
Accrued and unpaid dividends per share		100
Common stock, redemption per share		$ 12
Subsequent Event [Member] | Hurricane AMT, LLC [Member]
Purchase price of business		$ 12,500
Payment of cash to acquire business		8,000
Issuance of equity		4,500
Equity units value per unit		$ 10
Number of units sold		450
Subsequent Event [Member] | Hurricane AMT, LLC [Member] | Common Stock [Member]
Number of warrants to purchase common stock		125
Exercise price per share		$ 8
Subsequent Event [Member] | Hurricane AMT, LLC [Member] | Series A Fixed Rate Cumulative Preferred Stock [Member]
Number of preferred shares designated		100
Subsequent Event [Member] | TCA Global Credit Master Fund, LP [Member]
Repayment of borrowings		$ 2,000
Subsequent Event [Member] | Fog Cutter Capital Group Inc [Member]
Shares issued price per unit	$ 6.085
Dividend reinvest on share	8,000,000
Dividend amount reinvested in newly issued shares	$ 960
Number of common stock share issued	157,765