By the time he checked into federal prison in Oregon, Andy Wiederhorn had realized his career as a Wall Street dealmaker was probably over. It was 2004, and the former investment analyst and chief executive had pled guilty to filing a false tax return and forgiving a loan guarantee to a business associate through his former company, Wilshire Financial Services Group, which had been involved in a scandal surrounding Capital Consultants, a firm that had lost $350 million in union pension funds. “The Street is a very transactional place,” he says. “You are only as good as your next deal, and if you can’t do a deal, then you aren’t any good at all.”
After his release 14 months later, Wiederhorn flew to Los Angeles to take stock of one outstanding investment. Before prison, he’d founded a company called Fog Cutter Capital, which had some real estate holdings and such brick-and-mortar companies as a linen retailer and modeling agency. Fog Cutter had also invested in Fatburger, a burger chain based in Beverly Hills. So on his release, Wiederhorn made it a point to stop for lunch there. “Eating there after coming out of [prison] was like eating a 3-star Michelin meal,” he says. After relishing his Fatburger, fries, and chocolate shake, Wiederhorn decided he was going to devote all his energies to expanding the burger chain.
As of today, he has divested himself of almost all his other holdings and invested an additional $23 million to make the burger joint a franchise with 140 locations, including stores in China, Dubai, and 25 other counties. The company is on pace to open 60 new stores this year, has sold the rights to another 300, and cleared more than $100 million in annual sales in 2012. Not that there weren’t some growing pains. When Wiederhorn assumed control, the chain, once dubbed the Last Great Hamburger Stand, really was making a last stand of sort. In the late aughts, two subsidiaries declared bankruptcy in order to close stores, sell off inventory, and convert to a 99 percent franchisee-owned system. “The economy was the challenge, not the brand,” he says.
Wiederhorn, 47, has also surrounded himself by folks he can trust: His father-in-law, who has previous restaurant experience, is chief operating officer, while his brother-in-law and two sons head up Middle East expansion, marketing, and franchise sales, respectively. In short, the chain is family-operated again, if on a bit grander scale than when it started in 1952.
At long last, Wiederhorn says, there is a sense of purpose again. “If you are feeding people, you feel good about that,” he says. “I’ve gone from a 26,000-square-foot house to a 7,000-square-foot house and shed the corporate jet, and moved from having 1,000 employees to 45 employees, and it’s all good.” Despite the company’s name, he’s also dropped 25 pounds since abandoning the world of high-stakes number crunching to hawk—and eat more—Fatburgers. “I’m certainly happier, healthier, and a lot less stressed than I have been in a very long time,” he says.
Paynter is a Bloomberg Businessweek contributor.
