Despite starting franchising nearly three years ago, full-service burger brand Fat Patty’s hasn’t attempted to scale its system, until now.
Founded in 2007, Fat Patty’s was purchased in 2018 for $12.3 million by ARC Group Inc., which also owns Dick’s Wings & Grill and WingHouse, while also managing Tilted Kilt. Sean Oatney, Fat Patty’s chief development officer, said after taking over the brand, some work was needed to make it into a brand that could handle franchising.
Fat Patty’s Chief Development Officer Sean Oatney
“It had a great footprint with loyal guests, but we needed to do some ideation, like updating the menu and redoing the look a bit,” Oatney said.
In 2022, he said the brand had reached that point of readiness and then launched its system. Soon after, the brand attracted a franchisee group which purchased the four existing locations in West Virginia and Kentucky. Those owners have since opened a fifth location in Morehead, Kentucky, while a new franchisee is set to open a sixth location soon in New Jersey.
After a few years of monitoring Fat Patty’s’ progress in its initial stage as a franchise business, ARC Group decided there was enough demand to expand opportunities for ownership.
“The Fat Patty’s experience has been really good for our consumers,” Oatney said. “Everyone raves about the food, and because so many people loved that, we wanted to take it outside of Virginia and Kentucky, and open it up to more of the country.”
Oatney said the brand has so far opened restaurants in smaller, mid-sized cities, and has found success with an AUV of $2 million. The strategy moving forward is to continue targeting those markets with populations between 10,000 and 15,000, rather than major metropolitan areas.
“Geographically I think the smart expansion for us will be along the eastern seaboard,” Oatney said. “We’re tied to Gordon Food Services as one of our main food vendors that can provide for us anywhere in the U.S. So, if someone came to us from Colorado and wanted to open up tomorrow, we would happily open that.
“However, I think we’re trying to do that hub-and-spoke approach in the mid-Atlantic, from the northeast down to the southeast,” said Oatney. “Then over to the Midwest as well. Being in West Virginia and Kentucky, you tend to attract customers from Ohio, too.”
The brand is welcoming potential franchisees interested in both single- and multi-unit agreements. Oatney said the brand prioritizes candidates who have restaurant experience, specifically those with a full-service background, if possible.
“Overall, we want someone with that entrepreneurial spirit,” Oatney said. “Who can take that footprint that we find them and be able to develop that in their town with one unit or go with the multi-unit strategy. It definitely has to be the right franchise partner for multi-unit deals, because we want to make sure they have the right team that can deploy those locations and open them on a good development schedule.”
Specialty burgers are the highlight of Fat Patty’s menu
In the years ahead, Oatney said he expects in Fat Patty’s to have about 60 percent of the locations be owned by single-unit operators, while the rest will be multi-unit deals.
Once those future franchisees sign their deals, Oatney said the brand plans to work with them to select second-generation spaces, which has been common since the brand’s founding. The first-ever Fat Patty’s was established in a former furniture store, and Oatney said the trend will continue, though it will be in buildings that held restaurants going forward.
Oatney said existing buildings often include grease traps, hoods and refrigeration, saving owners money on development. The initial investment to open a Fat Patty’s ranges from $800,000 to $3 million; the latter is in cases of a completely new build.
As the brand opens locations in new markets, Oatney said he has confidence in the concept’s ability to bring in new customers by its menu and atmosphere.
“The pillar we stand on is our food,” Oatney said. “We stand behind our food, how different it is and how fun the restaurants are. We have a fun environment for our guests and there’s an area at our restaurants called the ‘backyard,’ where we have dart boards, shuffle boards and more games. We make it unique to the community. At our Morehead location in Kentucky, it’s next to Morehead State University, and the backyard is called ‘The Eagles Nest’ after their nickname.”