FAT BrandsFABTQ 49 Gross Margin % is 23.74% as of Sep. 2025, which is 50% below its 10-year median of 47.67. GuruFocus rates FABTQ with a GF Score™ of 49/100 and a GF Value™ of $74.40 (Possible Value Trap). The stock has 7 warning signs investors should review. Among 358 Restaurants companies, FAT Brands ranks worse than 78.21% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. FAT Brands's Gross Profit for the
three
months ended in Sep. 2025 was $33.2 Mil. FAT Brands's Revenue for the
three
months ended in Sep. 2025 was $140.0 Mil. Therefore, FAT Brands's Gross Margin % for the quarter that ended in Sep. 2025 was 23.74%.
Warning Sign:
FAT Brands Inc gross margin has been in long-term decline. The average rate of decline per year is -21.3%.
The historical rank and industry rank for FAT Brands's Gross Margin % or its related term are showing as below:
FABTQ'
s Gross Margin % Range Over the Past 10 Years
Min: 25.38 Med: 47.67 Max: 81.73
Current: 26.67
During the past 10 years, the highestGross Margin % of FAT Brands was 81.73%. The lowest was 25.38%. And the median was 47.67%.
FABTQ's Gross Margin % is ranked worse than 78.21% of 358
companies
in the Restaurants industry
Industry Median: 45.685
vs FABTQ: 26.67
FAT Brands had a gross margin of 23.74% for the quarter that ended in Sep. 2025 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for FAT Brands was -21.30% per year.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
FAT Brands had a gross margin of 23.74% for the quarter that ended in Sep. 2025 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
FAT Brands Gross Margin % Related Terms
FAT Brands Gross Margin % Historical Data
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The historical data trend for FAT Brands's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FABTQ vs KITL, MCD, SBUX: Gross Margin % Comparison
For the Restaurants subindustry, FAT Brands's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
FAT Brands Gross Margin % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, FAT Brands's Gross Margin % distribution charts can be found below:
* The bar in red indicates where FAT Brands's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
FAT Brands (FABTQ) has a Gross Margin % of 23.74% as of Sep. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on FAT Brands and its competitors. This is 50% below median its historical median of 47.67. Over the past decade, FAT Brands' Gross Margin % has ranged from 25.38 to 81.73. According to the industry distribution chart, FAT Brands ranks #280 out of 358 companies in the Restaurants industry, placing it in the top 78.2%.
Is FAT Brands' Gross Margin % too high?
FAT Brands' current Gross Margin % of 23.74% is 50% below median its 10-year median of 47.67. Over the past 10 years, this metric has ranged from a low of 25.38 to a high of 81.73. The Restaurants industry median Gross Margin % is 45.69. FAT Brands' value of 23.74% is 48% below this industry median. Based on the distribution chart, FAT Brands ranks #280 out of 358 companies in the Restaurants industry, which is in the bottom quartile relative to peers. Overall, FAT Brands has a GF Score™ of 49/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does FAT Brands' Gross Margin % compare to KITL and MCD?
According to the Restaurants industry distribution chart, FAT Brands ranks #280 out of 358 companies for Gross Margin %. This places FAT Brands in the lower half of its industry. The industry median Gross Margin % is 45.69. FAT Brands' value of 23.74% is 48% below this benchmark. Historically, FAT Brands' own Gross Margin % has ranged from 25.38 to 81.73 over the past decade. While the company's 10-year median is 47.67 vs. the industry median of 45.69, FAT Brands has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Restaurants company?
The median Gross Margin % among Restaurants companies is 45.69, based on 358 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. FAT Brands's current Gross Margin % of 23.74% is 48% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on FAT Brands and its competitors. For the Restaurants industry, the median Gross Margin % is 45.69 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. FAT Brands's current Gross Margin % is 23.74%, which is 50% below median its own 10-year median of 47.67. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is FAT Brands stock overvalued right now?
Based on GuruFocus' analysis, FAT Brands (FABTQ) is currently considered Possible Value Trap. The stock's GF Value™ is $74.40, compared to a current price of $0.21 — trading 99.7% below its estimated fair value. The current Gross Margin % is 23.74%, which is 50% below median its 10-year median of 47.67 and 48% below the Restaurants industry median of 45.69. FAT Brands' overall GF Score™ is 49/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For FAT Brands (FABTQ), the current Gross Margin % is 23.74% as of Sep. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is FAT Brands (FABTQ) Overvalued in 2026?
Based on GuruFocus' analysis, FAT Brands stock appears to be undervalued.
The current stock price of $0.21 is trading 99.7% below its estimated GF Value™ of $74.40.
GuruFocus considers FAT Brands to be Possible Value Trap.
Key valuation signals for FABTQ:
Gross Margin %: 23.74% (50% below median its 10-year median of 47.67)
GF Value™: $74.40 vs. price of $0.21 (99.7% below fair value)
Industry Position: 48% below the Restaurants median (#280 of 358)
No single metric tells the full story. See the FABTQ stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
FAT Brands Inc is a multi-brand restaurant franchising company. It develops, markets, acquires, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts around the world. The company operates as a franchisor of restaurants, where the company generally does not own or operate the restaurant locations but rather generates revenue by charging franchisees an initial franchise fee as well as ongoing royalties. For some of the company's brands, it also directly owns and operates restaurant locations. Its brands include Round Table Pizza, Fatburger, Johnny Rockets, Twin Peaks, and Elevation Burger among others. Geographically, the majority of the revenue for the company is generated from the United States.
49GF Score
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