Inside the history of Johnny Rockets, the 1950s diner-themed restaurant chain that Fatburger parent

• On Thursday, FAT Brands announced it would purchase retro-diner chain Johnny Rockets for $25 million.
• FAT Brands CEO Andy Wiederhorn spoke to Business Insider about why the company chose to make the purchase during the pandemic, and what FAT plans to do with Johnny Rockets.
• Take a look at the history of Johnny Rockets, which was founded out of a fashion retailer's nostalgia for the malt shops of his childhood, and later became the first branded restaurant chain to board a cruise ship.
• Visit Business Insider's homepage for more stories.

On Thursday, FAT Brands announced that it will add retro-diner chain and food court staple Johnny Rockets to its expanding portfolio of restaurant chains that also includes Fatburger and Hurricane Grill & Wings.

FAT Brands will purchase Johnny Rockets from Sun Capital Partners, Inc. for around $25 million, taking over the diner brand's 325 locations worldwide. FAT Brands CEO Andy Wiederhorn told Business Insider in an interview that the acquisition has been in the works for a while.

"We've been negotiating to buy this brand for several years," Wiederhorn said, adding that despite the pandemic, FAT Brands is "definitely going hunting right now rather than being hunted."

Wiederhorn isn't phased by the pandemic's market conditions and sees Johnny Rockets as a long-term investment, citing the brand's strong international presence and sheer unit volume. "COVID-19 is a short-term crisis, but it's not the be-all-end-all," Wiederhorn said.

Here's a look at the history of Johnny Rockets and why FAT Brands believes the chain has enduring appeal.

Johnny Rockets was founded in 1986 in Los Angeles.

Johnny Rockets was born on June 6, 1986 on Los Angeles' glamorous Melrose Avenue out of a fashion retailer's nostalgia for the malt shops of his childhood.

Ronn Teitelbaum, a 48 year-old luxury fashion retailer from Santa Monica, had frequented Santa Monica's diners as a child during World War II. After a long and successful career in fashion, Teitelbaum longed to recreate the old-fashioned dining experience of his childhood. So he did.

To describe the classic Americana feel he wanted to capture, Teitelbaum named his restaurant "Johnny" after Johnny Appleseed and "Rocket" for the Oldsmobile Rocket 88.

The first restaurant was an instant success.

Johnny Rockets was an instant hit with the swanky populace of West Hollywood and Beverly Hills, with crowds swarming the Melrose Avenue restaurant sometimes until 5 a.m.

Teitelbaum and his staff served 600-700 customers daily, incorporating dance routines to vintage jukebox tunes to entertain guests.

Johnny Rockets soon expanded quickly.

The restaurant's instant success quickly led to expansion, first throughout the United States and then abroad. Johnny Rocket's first international restaurants were in London and Tokyo.

As imitation Johnny Rockets restaurants popped up around the world, Teitelbaum won a series of lawsuits trademarking aspects of the brand, including its name and signature uniforms.

By the turn of the decade, Teitelbaum was opening a new restaurant every few weeks. In 1992, Teitelbaum brought in former Taco Bell executive Ray Cabana as president.

Fast-food or full-service?

Johnny Rockets won the right to open restaurants in places where fast-food burger joints otherwise wouldn't have been allowed, such as Fisherman's Wharf in San Francisco, California, by claiming it was a full-service restaurant. The brand continued to play on the strengths of both fast-food and full-service by operating at a quick turnover rate and entertaining sit-down guests.

Different location, different service.

Different Johnny Rockets locations sported different levels of service — and still do. Some are sit-down restaurants with dancing waiters, while some are quick-serve counter joints where customers grab their food and go. That flexibility would prove useful to the Tetelbaum's ambitious expansion plans.

Johnny Rockets was acquired by a mall developer in 1994.

In 1994, hotel and mall developer Carpenter Investment and Development Corporation purchased a majority share in what was then Johnny Rockets International, securing the chain's place in prime entertainment venues like malls, casinos, and more. Then, in 1995, Teitelbaum recused his position as CEO to former Burger King CEO Jeffrey Campbell, taking a board seat instead and staying actively involved in the business.

The chain continued to grow after Teitelbaum's death, taking an international turn.

Teitelbaum died of cancer on September 14, 2000, but Johnny Rockets continued to grow after his death.

The chain continued to expand within the US, but has become an international phenomenon over the last two decades, establishing a robust presence around the world especially in Latin America and the Arab Gulf states. And in 2015, the chain announced plans to open 100 new restaurants in China.

FAT Brands CEO Andy Wiederhorn told Business Insider that the chain's international presence inspired confidence in the brand's ability to succeed despite the pandemic.

"Their international business has been very strong," Wiederhorn said. "Johnny Rockets has been a little bit more affected by the pandemic, just because they have a number of shopping centers, amusement parks, etc. that have been closed in totality. But that's only about a third of their business. Most of the business is traditional restaurants, and half of those are international."

What's next for Johnny Rockets?

First, Johnny Rockets must weather the storm that is the pandemic. Under the umbrella of FAT Brands, it may be better equipped to do so. Wiederhorn emphasized that FAT's business model is based on acquiring and merging brands' back-of-house and corporate operations to save costs.

"By having one back office, one legal department, one accounting department, one purchasing department, there's a lot of savings there," Wiederhorn said.

That doesn't mean that other FAT Brands will cannibalize Johnny Rockets. Johnny Rockets will remain a separate brand, but will start sharing resources with other FAT brands like Fatburger, Elevation Burger, and others. Wiederhorn said that largely things will stay the same. However, Johnny Rockets guests should expect some new menu items in the near future.

"We do plan to innovate the menu by adding plant-based proteins and vegan milkshakes," Wiederhorn said. "But it's a great, well-known brand, it's iconic, and it doesn't need to be fixed too much here."

Wiederhorn confirmed that he plans to add Impossible burgers and Daiya vegan dairy products, which are already served at Fatburger, to Johnny Rockets' menu.

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