As the financial world tries to keep pace with the current digital age, many enterprises have begun to incorporate blockchain, the technology popularized for powering cryptocurrency’s largest asset, bitcoin. FAT Brands, the parent company of franchises such as Fatburger, Bonanza Steakhouse and Ponderosa Steakhouse, in cooperation with digital securitization platform Cadence, is tokenizing a bond offering on the ethereum blockchain.
“FAT Brands is working with Cadence as the lead arranger to do a whole business securitization,” FAT Brands CEO Andy Wiederhorn said to me in an email. “Similar to other issuances arranged by Cadence, a digital asset will be created that is a digital reflection of ownership for every investor in the structured notes,” Wiederhorn added.
Public company FAT Brands (FAT: Nasdaq) oversees many sizable franchised restaurants, including Buffalo’s Cafe, Hurricane Grill & Wings and six others. The California-based parent is working with New York-based, Coinbase-backed Cadence, “a digital securitization and investment platform for private credit,” according to Wiederhorn. “The FAT Brands securitization will also be a private credit issuance.”
“In total, Cadence has facilitated $17 million in debt securities on a blockchain, ranging from $20,000 to $4 million per fund, with $10.8 million still outstanding,” Forbes wrote in an article.
FAT Brands plans to use fee payments from its franchises to back the brunt of its $30 million securitization, a document stated. The bond will start off with standard paper-based issuance methods. Cadence will then take the issued paper securities and tokenize them, the document detailed. FAT Brands aims to bring the security to the public by then end of 2019.