Fatburger, Johnny Rockets parent: Supply chain shortage is 'real' and won't go away

Fatburger, Johnny Rockets parent says supply chain shortage is ‘real’ and won’t go away

FAT Brands Inc. CEO Andrew Wiederhorn provides insight into how the supply chain shortage impacts the restaurant industry. 

FAT Brands Inc. CEO Andrew Wiederhorn said the supply chain shortage is "real" and isn’t going to "go away."

"The supply chain, it's not just about the food costs, it's about the drivers and the shortage for labor everywhere," Wiederhorn told "Cavuto: Coast to Coast," Friday. 

FAT Brands is the owner of 14 different restaurant brands, including Fatburger and Johnny Rockets.

FATBURGER, JOHNNY ROCKETS PARENT: LABOR 'CRISIS' A ‘TOTAL NIGHTMARE’

Wiederhorn’s comments come on the heels of producer prices climbing at the fastest annual pace on record for the fifth consecutive month in August. Supply-chain disruptions and materials shortages continued to put upward pressure on costs.

FAT Brands CEO on supply chain concerns

FAT Brands Inc. CEO Andrew Wiederhorn argues producer price surge is hurting restaurant franchises amid the supply chain shortage.

"The pricing situation from the supply chain is really hurting the franchise operators of restaurants," FAT Brands CEO added.

 "They're having to take price, in terms of raising price on the products they sell, and I think it's going to go on for a while. I just don't see it being transitory."

Wiederhorn argued that restaurant operators operate on a 5%-15% margin and if there’s a significant increase in food costs, businesses will be forced to also raise their prices to "stay in business, to make money and pay the bills."

PRODUCER PRICES SURGE 8.3% ANNUALLY, FIFTH STRAIGHT RECORD GAIN

Meanwhile, recent Labor Department data shows a growing gap between job openings and hiring, which comes as companies are having a hard time filling roles regardless of the more than 8 million people out of work. 

Despite the labor shortage in the U.S., he said the "restaurant industry is back" and it’s "booming" since the start of the coronavirus pandemic.  

However, Wiederhorn noted that vaccine mandates have become an additional challenge to restaurants. 

"It's really hard on the operators. They have enough going on to start their businesses back up after COVID," he remarked. "Now they have to be the vaccine police, it’s really putting the burden where I don't think it belongs."

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FAT Brands CEO suggested that the government needs to be "understanding" and everybody should be patient, yet supportive. 

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"Of course, I want everyone to be vaccinated, but this approach of having…restaurant…hostess or hosts check for the vaccine card is nuts."

FOX Business' Talia Kaplan and Jonathan Garber contributed to this report. 

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