Fat Shack sandwich chain secures $250K investment from Mark Cuban

Fat Shack — a Colorado-based sandwich chain known for its over-the-top fried ingredients and late-night hours — started out as a former college student’s entrepreneurial solution to the midnight munchies in his sleepy college town. But since opening its first location in New Jersey in 2010 (which has since closed), Fat Shack has grown to 14 locations in Colorado, Washington, and Texas, with more to come.

Fat Shack owners Tom Armenti and Kevin Gabauer began the latest chapter of their sandwich chain’s expansion with a $250,000 investment from Dallas Mavericks owner Mark Cuban. Armenti and Gabauer secured the partnership after appearing on an episode of ABC’s “Shark Tank,” which aired on May 12. Since the episode was first taped, Cuban — who now owns a 15% stake in Fat Shack — helped Armenti and Gabauer plan their 12^th franchised location and 14^th location overall, which will open later this month in Fort Worth, Texas, near the Texas Christian University campus.

“The partnership has really just begun, but so far Mark has been awesome to work with,” Armenti said. “He is really responsive when we have any questions and has already given us plenty of advice that we have implemented both online and in our stores.”

Fat Shack is part of a growing niche of late-night eateries marketing themselves toward hungry students, like the New York City-based Insomnia Cookies. The original Fat Shack operated out of a bagel shop in Ewing, N.J. After the bagel shop closed for the day, Armenti would prepare and deliver 6-inch, 9-inch or 12-inch sandwiches for an average check of $18 each to the neighboring college communities at his alma mater, The College of New Jersey, and the nearby Rider University until 4 a.m. on the weekends.

Fat Shack became known for its over-the-top “fat sandwiches” marketed toward late-night college partiers, like the popular Fat Doobie, loaded with chicken fingers, French fries, onion rings, mozzarella sticks, and honey mustard, or the Fat Donkeylips, topped with chicken fingers, French fries, lettuce, Buffalo sauce and bleu cheese.

After the success of his first store, Armenti opened Fat Shack’s first full-time location in Fort Collins, Colo. in 2011. In 2013, Armenti brought his college friend Kevin Gabauer onboard. While the original location closed in 2017, Armenti and Gabauer said they would not be opposed to bringing the brand back to its home state in the future.

Moving forward, the Fat Shack team will offer funding assistance to prospective franchisees and will mentor hourly employees to help prepare them for prospective roles as future franchisees.

“The Fat Shack was started when I was 22 years old for less than $5,000,” Armenti said. “Since I did not have the capital to open a full store, I was lucky to make a unique deal to operate inside of a local bagel shop [….] Like me, most people do not have the access to the amount of capital necessary to open their own restaurant.  This is why we have offered financing to our employees who have proven themselves to be the best of the best and have the drive to succeed with their own Fat Shack location.”

Armenti and Gabauer are planning a national expansion to new markets but have not yet announced upcoming locations.

Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi