Fatburger chief executive has the fast-food chain sizzling
The gig: Andrew Wiederhorn is the chairman and chief executive of Fatburger Inc., a fast-food restaurant chain based in Beverly Hills. The first Fatburger opened on Western Avenue in Los Angeles in 1947 and gained notoriety when rappers Ice Cube, Tupac Shakur and the Notorious B.I.G. all mentioned the restaurant in songs. Since 2003, Fatburger has been owned by Fog Cutter Capital Group Inc., a Santa Monica investment company of which Wiederhorn is also chairman and CEO.
Self-starter: Wiederhorn grew up in a single-parent family in Portland; his father died when he was age 9. In high school, he hired a lawyer to help him get permits to rent out jet-skis on the Willamette River. Wiederhorn attended USC and graduated in three years with a bachelor’s degree in business. At 21, he founded the investment firm Wilshire Credit Corp. Billionaire philanthropist Eli Broad was one of his first financial backers, investing $300 million.
Boom times: Wiederhorn moved back to Portland in 1990, where he founded Fog Cutter Capital in 1997. By the late ‘90s, he was worth an estimated $140 million. In 2000, when Magic Johnson bought a stake in Fatburger, Fog Cutter helped finance the change of ownership for the struggling company. In 2003, Fog Cutter bought a controlling stake in Fatburger for $7 million.
Hard knocks: After one of Wiederhorn’s business associates in Portland was arrested under a 22-count federal indictment, including charges of mail fraud, money laundering and witness tampering, authorities began investigating Wiederhorn too. In 2004, he pleaded guilty to charges of paying an illegal gratuity to his associate and filing a false tax return. He spent 15 months in prison in Sheridan, Ore. “I saw an awful lot of terrible things,” Wiederhorn said. “Everything else seems somewhat mild.” He says his attorneys had advised him that his actions were legitimate business deals. “At some point, you have to look in the mirror and accept that you can’t do anything more,” Wiederhorn said. “Dealing with a failure showed me that all I can change is where I go from here.”
Righting the ship: When Wiederhorn got out of prison in 2005, he became chief executive of Fatburger. The company had changed ownership multiple times and was not doing well. Wiederhorn and Fog Cutter invested $23 million more in Fatburger, closed several dozen unprofitable stores and converted the remaining restaurants to franchises in an attempt to turn the company around. “Having a restructuring background, I know that you have to make practical decisions, not ones based on hope,” Wiederhorn said. “It’s a lot of trench fighting. A lot of challenges.” In 2011, 25 stores in California and Nevada that had entered bankruptcy protection were auctioned off.
Rebirth: Fog Cutter relocated to Santa Monica in 2010 to reconnect with Fatburger’s roots, Wiederhorn said. The company is aggressively expanding its locations and offerings. Fatburger had 40 stores in 2003. By the end of 2012, there were 150 Fatburgers in 27 countries. Fatburger has built flagship stores in Dubai and Macao, and is beginning to move into other countries in Asia. The company last year bought Buffalo’s Cafe, a casual wings franchise similar to Wingstop. The first Buffalo’s Cafe opened in Palmdale in December. A joint Fatburger-Buffalo’s Cafe is slated for Santa Monica and Sepulveda boulevards.
Life outside work: Wiederhorn, 46, is a major donor to USC Associates, an academic support group. He also speaks to entrepreneurship classes at USC. He enjoys skiing, tennis and spending time with his wife, Tiffany, and their six children, three of whom went to USC. “The things that are critical to your survival have to do with your personal life,” Wiederhorn said. “You can’t take problems home. They’ll all be there in the morning when you get back to work. I try to tell my employees that: We’re just flipping hamburgers. You can’t take all this too seriously or it’ll drive you crazy.”
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