Though the casual dining space is believed by some to be a weak link in the restaurant industry today, fast-casual chain Fatburger is ready to test the public market.
Los Angeles-based Fatburger and Buffalo's Cafe CEO Andy Wiederhorn announced Thursday morning that his holding company, FAT Brands, has been trying to gauge investors' appetite for an initial public offering.
"We're testing the waters right now," Wiederhorn told CNBC's "Squawk Box" in an exclusive interview. He added that the business' goal in going public would be to acquire many more franchise brands in the fast-casual category. For now, Wiederhorn heads up two — Fatburger and Buffalo's Cafe, which started in Georgia and is known for its chicken wings.
The public entity would trade under the ticker symbol "FAT" — which stands for "fresh, authentic, tasty," Wiederhorn said. FAT Brands said it aims to raise up to $20 million in its IPO. The company is in the midst of adding another brand to its restaurant portfolio and growing its partnerships with franchisees globally.
"Consumers around the world love American brands," Wiederhorn told CNBC. He said he wants to make it easier for the average investor to invest in their favorite restaurants — ones that serve up classic hamburgers, pizzas and milkshakes.
Fatburger's competitors today include Shake Shack, which went public in early 2015, Smashburger, In-N-Out, Five Guys and California-based The Habit Burger.
Meantime, Food Network star and chef Bobby Flay is preparing to take his chain, Bobby's Burger Palace, public, seeking to raise about $15 million. But analysts remain skeptical of these restaurants' overcrowding the segment.
"The smaller chains that don't have the scale, you know, that might not be the best time to do it because you're finding ways that Amazon is disrupting the business," Morningstar's R.J. Hottovy recently told CNBC's "Closing Bell." "And overall traffic is down in the restaurant space. I'd be a little wary with an offering like this," he said referring to a Bobby's Burger Palace IPO.
Wiederhorn is convinced that technology has helped his restaurants grow tremendously and that it will continue to do so.
"It's about the food first, but technology has really driven [our] sales. ... We're seeing double-digit comps in the U.S. with delivery [apps]."
"For us, delivery has just killed it," and in a good way, Wiederhorn said.
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