---
title: "Round Table Pizza Franchisees Sue FAT Brands Over Marketing Fund Mismanagement"
url: https://burnaze.com/article/b65d50e8-4d64-4606-af82-ecf1a4e47885
source: "1851 Franchise"
original_url: https://1851franchise.com/round-table-pizza-franchisees-take-fat-brands-to-court-over-marketing-fund-mismanagement-2730870
category: "Restaurants"
industry: "Restaurants"
topics: ["Marketing"]
published: 2025-11-27T15:10:01.000Z
modified: 2026-10-31T20:30:32.160Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/12db3ad83e02382d5ae674d300b94cee7281.jpg
---

# Round Table Pizza Franchisees Sue FAT Brands Over Marketing Fund Mismanagement

**TL;DR:** Round Table Pizza franchisees have sued FAT Brands over mismanagement of the chain's marketing fund, causing a decline in average unit sales. FAT Brands is also facing financial distress after failing to make a required payment on its securitized debt.

*originally published in 1851 Franchise on 2025-11-27. [Read the original](https://1851franchise.com/round-table-pizza-franchisees-take-fat-brands-to-court-over-marketing-fund-mismanagement-2730870).*

## Story

Round Table Pizza franchisees have filed a lawsuit against FAT Brands, accusing the company of “intentional mismanagement” of the chain’s marketing fund. According to the Round Table Owners Association, marketing efforts began deteriorating after FAT Brands acquired the chain in 2021, shifting from cohesive, effective campaigns to disjointed initiatives with no clear strategy. The association says the situation worsened dramatically this year, when a missed payment to a marketing consultant in March caused the entire marketing system to “collapse,” contributing to the steepest decline in average unit sales the brand has seen in decades.

The lawsuit arrives at a moment of significant financial distress for FAT Brands. Just days earlier, the company disclosed in an SEC filing that it risks bankruptcy after failing to make a required payment on its securitized debt, triggering a demand for immediate repayment of nearly $1.3 billion.

Franchisees allege that FAT Brands has compounded the turmoil by diverting $800,000 from Round Table’s marketing fund to pay for its 2022 FAT Summit conference and by transferring tens of millions of dollars each year to company affiliates — funds that were originally expected to be returned. In 2025, the full $56.9 million transferred was reportedly deemed permanent.

Operators also accuse FAT Brands of refusing repeated audit requests for the marketing fund, despite annual appeals since 2023. The lawsuit further claims the franchisor reclassified marketing funds as gross revenue in order to bypass a franchise agreement rule that caps vendor rebates at 3.8% of gross revenue — an unusual accounting tactic that allegedly increased the company’s rebate income. This is not the first time FAT Brands has faced similar allegations; another portfolio brand, Hurricane Grill & Wings, has also sued over marketing fund misuse.

## Entities

- 1851 Franchise (publication)
- QSR (sector)
- Fat Brands (company)
- Round Table Pizza (company)
- Hurricane Grill & Wings (company)
- franchisee lawsuit (topic)
- Fat Brands acquisition of Round Table Pizza (deal)
- bankruptcy risk (topic)
- financial distress (topic)
- Round Table Owners Association (company)
- marketing fund mismanagement (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/round-table-pizza-franchisees-take-fat-brands-to-court-over-marketing-fund-mismanagement-2730870). Summarized by Burnaze (https://burnaze.com/article/b65d50e8-4d64-4606-af82-ecf1a4e47885).