Joe Gomes: Great. One more if I may. On the factory, one of the goals was to get some third-party business in there. I just wanted to see where that effort stands today.
Andy Wiederhorn: We’re actively involved in RFPs for various third-parties to produce quite a bit of cookie dough and pretzel mix-type products for them right now. We aren’t actually producing yet but we’re in the middle of several RFPs. We’ve grown the utilization of the capacity by selling cookies and other products across our other restaurants but – and we have quite a bit more to go with that. But we want one or two of these RFPs that we’re in the middle of to really drop in our lap and that will soak up quite a bit of capacity at a good margin. The factory has the capacity as I mentioned earlier to really, really grow significantly larger because when we say 45%, that’s before we spend any CapEx to knock a wall down or increase the size of some of the equipment that we have in the factory which would double the capacity yet again.
So we had a lot of runway in the factory. It’s a very valuable asset. And if you put that together with Twin Peaks, between those two assets alone, you have enough value to retire most likely all of the FAT Brands debt. So we’ve looked at it as we really want to maximize the value we extract from those assets as we look to retiring debt.
Joe Gomes: Okay. Thanks, Andy. Appreciate the answers.
Andy Wiederhorn: Great. Thank you, Joe. Operator, next question.
Operator: The next question comes from Roger Lipton with Lipton Financial. Please proceed.
Roger Lipton: Yes. Hi, Andy and Ken. Can you tell us anything a little more specifically as part of the timing of the Twin Peaks offering? Any guess at all in terms of when it might move ahead?
Andy Wiederhorn: I think it’s — it depends on market conditions, but hopefully, it would be something that would be a Q3 event.
Roger Lipton: I didn’t hear. Something…
Andy Wiederhorn: Q3 event.
Roger Lipton: Oh, Q3. Okay. Thank you. And…
Andy Wiederhorn: When we file the IPO document, the S-1, we will file it on a confidential basis, but we’ll put out a statement that it was filed confidentially. So very well know that it’s been filed. And then we have to go through the SEC process and then we’ll see how the market is.
Roger Lipton: Okay. And something keeps growing. So a little delay on makes it a little larger.
Andy Wiederhorn: Time is on our side. Yes, absolutely. Time is on side. EBITDA just growing.
Roger Lipton: Right. And the Smokey Bones stores or restaurants, how many of those or do you think are conversion possibilities to Twin Peaks? What’s your —
Andy Wiederhorn: A fair number of them. I’m not going to get into specifics, because we’re negotiating with landlords today about the conversions. But we’ve identified a fair number of them that make a lot of sense to convert. And there’s a few on the fringe and we’ll see how those go. And if not, they stay as Smokey Bones.
Roger Lipton: Right. And what can you tell us about the general tone of business in the multi-branded system, at least domestically?
Andy Wiederhorn: So I would say a couple of things. One, business is solid. The commodity costs have come down significantly, which is good. I think consumers are sort of at their limits in terms of how much price they’re willing to take. So operators have taken price to maintain their margin, but there’s definitely traffic pushback on that across the entire industry, not just within FAT 18 brands. And we have the new increased minimum wage coming in California in just a few weeks to $20, and you’re going to see prices go up again. So it will be interesting to see how California response. The good news is it applies to everybody, not just FAT brands. And I don’t see that any way around that. And of course, the voters must have known what they were getting into, and they elected everybody to raise these wages from to $20 or soon to be $25.
Roger Lipton: Right. Right. All right, that’s all I need for now. Thank you very much.
Andy Wiederhorn: All right. Roger, thank you.
Operator: [Operator Instructions] And at this time, we are showing no further questioners in the queue, and this does conclude our question-and-answer session. At this time, I would like to turn the conference back over to Andy Wiederhorn for any closing remarks.
Andy Wiederhorn: Thank you, operator. I want to thank everyone for joining us today. This concludes our call.
Operator: The conference has now concluded. Thank you for attending today’s presentation, and you may now disconnect.
