FAT BRANDS INC. (NASDAQ: FAT) Private Placement of up to 5,000 Units each Unit consisting of 100 Shares of Series A Fixed Rate/Floating Rate Cumulative Preferred Stock (Liquidation Preference $100 per share) and Warrants to Purchase 185 shares of Common Stock at $18.00 per share Purchase Price: $10,000 per Unit Maximum Offering Amount is $50,000,000

January 15, 2018 Legal Disclaimer: FAT Brands Inc. is currently undertaking a private placement offering pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506 of Regulation D thereunder. Investors should consider the investment objectives, risks and investment time horizon carefully before investing. These securities are being offered and sold in reliance on the exemption from registration set forth in Section 506(c) under the Securities Act. In accordance therewith, you should be aware that (i) these securities may be sold only to “accredited investors,” which for natural persons are investors who meet certain minimum annual income or net worth thresholds; (ii) these securities will only be offered in reliance on an exemption from the registration requirements of the Securities Act and will not be required to comply with specific disclosure requirements that apply to registration under the Securities Act; (iii) the Securities and Exchange Commission will not pass upon the merits of or give its approval to the securities, the terms of the offering, or the accuracy or completeness of any offering materials; (iv) these securities will be subject to legal restrictions on transfer and resale and investors should not assume they will be able to resell their securities. Investing in these securities involves risk, and investors should be able to bear the loss of their investment. This term sheet and other information provided to investors about FAT Brands may contain “forward-looking statements” with the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions for forward looking statements. This information is supplied from sources we believe to be reliable but we cannot guarantee accuracy. Although we believe our expectations expressed in such forward looking statements are reasonable, we cannot assure you that they will be realized. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the anticipated results.

1450 Broadway 26th Floor New York, NY 10018

www.tripointglobalequities.com

Phone: 212 732 7184 Fax: 646 786 3454

FAT BRANDS INC. The following is a summary of the contemplated principal terms of the offer and sale by FAT Brands Inc., a Delaware corporation (the “Company”) (NASDAQ: FAT), of investment Units consisting of Series A Fixed Rate/Floating Rate Cumulative Preferred Stock and Common Stock Purchase Warrants. You should not rely on this summary, but instead read the definitive agreements that will be circulated to all investors. Any legally binding obligation will only be made pursuant to definitive agreements to be negotiated and executed by the parties. Type of Security being Sold: The Company is offering (the “Offering”) up to a maximum of $50,000,000 (the “Maximum Amount”) of units (the “Units”), with each Unit consisting of (i) 100 shares of Series A Fixed Rate/Floating Rate Cumulative Preferred Stock (the “Preferred Shares”), and (ii) a 3-year warrant to purchase 185 shares of the Company’s Common Stock at $18.00 per share (the “Warrants”). The maximum aggregate number of Units to be issued in the Offering is 5,000 Units. Anticipated Closing Date:

The Offering will close on a rolling basis commencing on approximately January 31, 2018 (the “Closing”), and continue thereafter for up to 90 days following the initial closing until the Maximum Amount has been reached or the Company decides to terminate the Offering in its sole discretion. All funds will be deposited into a third-party escrow account with Wilmington Trust and will be held in escrow pending the Company’s acceptance of subscriptions and the satisfaction of all other conditions applicable to each closing.

Offering Size:

Up to a Maximum Amount of $50,000,000 (5,000 Units). The Company reserves the right, without notice to or consent from any investor, to increase the number of Units offered in the Offering by up to 20% if this Offering is oversubscribed, in the discretion of the Board of Directors.

Price per Unit:

$10,000 per Unit (minimum investment one Unit)

Call Feature:

The Preferred Shares may be redeemed by the Company on the following schedule: Year 1: 110% of liquidation preference, plus any accrued dividends Year 2: 105% of liquidation preference, plus any accrued dividends After 3: 100% of liquidation preference, plus any accrued dividends

Liquidation Preference:

$100.00 per Preferred Share. A change of control as a result of merger or consolidation (other than event in which shareholders own a majority of voting power of the surviving or acquiring corporation), or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company will be deemed to be a liquidation event.

1450 Broadway 26th Floor New York, NY 10018

www.tripointglobalequities.com

Phone: 212 732 7184 Fax: 646 786 3454

Preferred Dividends:

The Preferred Shares will receive annual dividends as follows: Year 1: 8.0% cash dividend, plus 5.6% PIK dividend (payable end of Year 3) Year 2: 8.0% cash dividend, plus 5.6% PIK dividend (payable end of Year 3) Year 3: 10.0% cash dividend, plus 5.6% PIK dividend (payable end of Year 3) Year 4: 10.5% cash dividend Year 5: 11.0% cash dividend Year 6: 11.5% cash dividend Year 7: 12.0% cash dividend Year 8: 12.5% cash dividend Year 9 and thereafter: 13.0% cash dividend Dividends will be payable quarterly and computed on the basis of the actual number of days elapsed and a 360-day year. The Preferred Shares will be senior preferred equity of the Company and contain customary provisions restricting the payment of dividends on, and the repurchase of, junior equity at any time when all dividends on the Preferred Shares have not been paid in full in cash.

Warrant Coverage:

The Warrants will entitle the holder to purchase 185 shares of Common Stock at $18.00 per share. The Warrants will expire three (3) years from the date of issuance. The Warrant exercise price will be subject to adjustment for stock splits, stock dividends and consolidations. Warrants will have a cashless exercise, only in the event that the underlying shares are not registered or qualified for resale. Upon notice of exercise of the Warrants, the Company may instead elect to redeem the Warrant for cash for an amount equal to the value of shares then issuable upon a cashless exercise. The Company may force either the cashless exercise or redemption of the Warrants, at its option, at any time following the one-year anniversary of the initial closing if: (i) the 30-day volume-weighted daily average price of the common stock exceeds 200% of the exercise price of the Warrants, as adjusted for stock splits, stock dividends or the like; and (ii) if shares are to be issued, the common stock remains listed on a national securities exchange, the shares have been registered for resale or investors may sell all shares without restriction under Rule 144, and the average daily trading volume is at least 200,000 shares of common stock during the prior 30-day period.

Voting Rights:

1450 Broadway 26th Floor New York, NY 10018

The Preferred Shares will not vote with the Common Stock, but will have voting rights as required by law and majority consent rights to (i) merger, consolidation or share exchange that materially and adversely affects the rights, preferences or privileges of the Preferred Shares, unless full redemption price is paid in cash; (ii) amending the certificate of incorporation to adversely affect the Preferred Shares; (iii) authorizing securities that are senior with respect to dividends or

www.tripointglobalequities.com

Phone: 212 732 7184 Fax: 646 786 3454

liquidation; and (iv) declaring or paying any junior dividends or repurchasing any junior securities during any time that all dividends on the Preferred Shares have not been paid in full in cash. Registration Rights:

The Company will file with the SEC a continuously effective resale Registration Statement for the Preferred Shares and shares of Common Stock underlying the Warrants.

Trading:

The Company will seek to have the Preferred Shares quoted on the OTC Markets within 90 days of closing of the Offering.

Investors:

The Units will be sold only to accredited investors within the meaning of the Securities Act pursuant to the exemption from the registration requirements of the Securities Act provided by Rule 506(c) of Regulation D promulgated under the Securities Act.

Investment Documents:

The Units will be sold pursuant to a Subscription Agreement prepared by the Company and in a form acceptable to the Investors.

Information Rights:

The Investors will be entitled to customary information rights during any time that the Company is not current in its SEC periodic reporting.

Use of Proceeds:

The Company intends to use the net proceeds of the Offering for: (i) acquisitions of new restaurant chains and brands, (ii) repayment of indebtedness of the Company, and (iii) working capital. Any excess proceeds will be used for general corporate purposes.

Risk Factors:

The Subscription Agreement will contain a summary of what the Company believes are the principal risks associated with this investment, but such list is not intended to be exhaustive.

Expenses:

The Company will pay up to $45,000 in the aggregate towards the Placement Agent counsel legal fees.

Placement Agent Fee:

The Company has entered into a placement agent agreement with Tripoint Global Equities, LLC (“Tripoint”) with regard to sales of the Units to Investors (“Tripoint Investors”). As managing agent of the Offering, Tripoint is entitled to a cash fee of up to seven and one half percent (7.5%) of the gross proceeds of such sales, subject to certain terms and conditions. In addition, the Company has agreed to issue to Tripoint compensatory warrants to purchase up to four percent (4.0%) of the original principal amount issued to such Tripoint Investors in the Offering at the same terms and conditions as the investors.

1450 Broadway 26th Floor New York, NY 10018

www.tripointglobalequities.com

Phone: 212 732 7184 Fax: 646 786 3454