Smokey Bones, a 25-year-old barbecue restaurant chain, is undergoing a dramatic contraction after being acquired by FAT Brands in 2023. What began as a 60-unit concept is now a much smaller operation following closures and conversions.
By early 2026, a total of 39 locations have been removed from the original footprint through shutdowns or rebranding, leaving roughly 20 Smokey Bones restaurants still operating nationwide.
How FAT Brands Entered the Picture
FAT Brands acquired Smokey Bones in 2023, positioning it as a turnaround opportunity within its growing restaurant portfolio. The chain was later spun into a new subsidiary, Twin Hospitality Group, in January 2025.
Management initially projected stability after trimming underperforming units, but mounting debt pressures at the parent company soon complicated those plans and reshaped Smokey Bones’ future.
Planned Closures Turn Into Deeper Cuts
Twin Hospitality announced in 2025 that 15 underperforming Smokey Bones locations would close, with most shutting their doors before the end of the year and the remainder by early 2026. At the time, executives said 26 locations would remain.
Subsequent closures exceeded that outlook, and company disclosures and store listings now indicate only about 20 Smokey Bones locations are still open.
Conversions Shrink the Brand Further
In addition to outright closures, Twin Hospitality identified 19 Smokey Bones restaurants for conversion into Twin Peaks lodges, a sports-bar concept also owned by FAT Brands.
These conversions removed more BBQ locations from the map while keeping the real estate active under a different brand. Together, closures and conversions account for the removal of 39 restaurants from the original 60-unit Smokey Bones footprint.
Why Twin Peaks Looked More Attractive
The shift toward Twin Peaks was driven by economics. Company data showed two completed conversions boosted average unit volumes from roughly $3.5 million as Smokey Bones to about $7.8 million as Twin Peaks.
That performance gap made Twin Peaks a priority for capital and management attention, even as Smokey Bones continued to generate positive cash flow at the unit level.
The Debt Crisis Looming Over Everything
The strategic reshaping of Smokey Bones is unfolding against a much larger financial threat. In November 2025, FAT Brands disclosed that trustee UMB Bank had issued notices accelerating approximately $1.26 billion in securitized debt.
The action followed payment defaults and made the full principal and accrued interest immediately due—an obligation the company said it could not currently meet.
Bankruptcy Risk Becomes Explicit
In regulatory filings, FAT Brands warned that the debt acceleration or any foreclosure on pledged collateral could materially harm its business and liquidity.
The company acknowledged it might seek protection through a Chapter 11 bankruptcy reorganization if a restructuring deal cannot be reached. The collateral backing the debt includes royalty streams and assets tied to brands such as Smokey Bones and Twin Peaks.
Financial Performance Under Pressure
The strain is visible in recent results. For the third quarter of 2025, FAT Brands reported revenue of about $140 million, down year over year, alongside a net loss of $58.2 million.
Same-store sales declined, and system-wide sales fell more than 5%. Closures at Smokey Bones and softer consumer traffic weighed on performance across the portfolio.
Interest Costs Swallow the Business
Debt service remains a major burden. FAT Brands disclosed that interest expense alone exceeded $100 million during the first nine months of 2025.
That level of financing cost has limited flexibility, even as CEO Andy Wiederhorn has stated the company generates approximately $60 million in free cash flow—an amount dwarfed by the scale of accelerated debt obligations.
Twin Peaks Isn’t a Cure-All
While Twin Peaks produces higher volumes per unit, it has not been immune to pressure. The brand reported operating losses of roughly $26 million over the first nine months of 2025 and posted same-store sales declines for four consecutive quarters.
The results highlight that conversions improve unit economics but do not resolve the parent company’s balance-sheet challenges.
Workers Feel the Immediate Impact
Restaurant closures have direct consequences for employees. The shutdown of at least 15 Smokey Bones locations eliminated jobs for servers, cooks, bartenders, and managers.
Additional losses followed as more units disappeared than initially planned. While the company has not released precise employment figures, the affected locations across multiple states likely represent hundreds of displaced workers.
Five States Lose Local BBQ Spots
Confirmed closures and conversions have affected communities in Florida, Illinois, Ohio, New York, and Pennsylvania. Locations in cities such as Orlando, Rockford, Maumee, Cheektowaga, and Robinson Township have gone dark.
For many areas, Smokey Bones was a long-standing casual dining option, and its exit reflects broader stress across the sit-down restaurant sector.
A Chain Far Smaller Than Its Peak
At its height, Smokey Bones operated around 60 restaurants nationwide. By early 2026, only about 20 remain under the original brand—a roughly two-thirds reduction in footprint in less than three years.
Industry observers now cite Smokey Bones alongside other once-prominent chains that have sharply downsized amid rising costs, heavy leverage, and uneven customer traffic.
Strategy vs. Survival
Management has argued that pruning weak units and shifting capital to stronger brands is necessary to survive. Yet the speed and scale of Smokey Bones’ contraction underscore how limited those options become when debt overwhelms operations.
Even profitable restaurants can be sacrificed when a parent company faces immediate, multibillion-dollar repayment demands.
What Comes Next for Smokey Bones
With debt negotiations unresolved and bankruptcy openly on the table, the future of Smokey Bones remains uncertain. The remaining locations continue operating for now, but their fate is tied to FAT Brands’ ability to restructure its obligations.
For workers, diners, and communities already impacted, the chain’s rapid downsizing offers a cautionary tale of leverage overpowering legacy brands.
Sources:
- “25-year-old BBQ chain closes 39 restaurants as bankruptcy fears grow” — TheStreet.
- “An American Style Barbecue Chain Scales Back After Closing Dozens of Locations” — What Now Media Group (What Now).
- “A lot of restaurant chains announced closures last year” — Restaurant Business Online.
- “FAT Brands warns of potential bankruptcy after $1.26 billion debt acceleration” — American Recruiters.
- “FAT Brands warns of potential bankruptcy after $1.26 billion debt acceleration” — Yahoo Finance.
- “Why FAT Brands could go bankrupt soon” — Nation’s Restaurant News.