What is the agreement between Associate, Company, and FSI regarding Fat Shack?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Associate, Company, and FSI have reached an understanding and agreement with regard to nondisclosure by Associate of confidential information and with respect to noncompetition by Associate with FSI and Company.
NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Associate, Company and FSI, intending legally to be bound, agree as follows:
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Confidential Information.
Associate recognizes and agrees that certain proprietary information relating to FSI and its operations ("Confidential Information") is owned by and treated as
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, the agreement between the Associate, the Company (franchisee), and FSI (Fat Shack Inc.) primarily concerns nondisclosure of confidential information and noncompetition. The Associate, who is affiliated with the franchisee in some capacity, gains access to confidential information related to Fat Shack's operations and licensed methods. To protect Fat Shack's proprietary information, FSI requires the Associate to enter into a Nondisclosure and Noncompetition Agreement. This agreement is a material term of the Franchise Agreement between FSI and the franchisee.
The Nondisclosure and Noncompetition Agreement ensures that the Associate does not disclose confidential information or compete with Fat Shack during their affiliation with the franchisee and even after the affiliation ends. The agreement recognizes that Fat Shack's confidential information, including know-how, systems, designs, trade dress, and trade secrets, is valuable and unique. The Associate agrees not to use this information for personal benefit or disclose it to third parties without FSI's written consent. This includes refraining from involvement with any Competitive Business.
Furthermore, the agreement outlines that any disputes arising from it will be resolved through binding arbitration. If FSI is a party to the dispute, the arbitration will occur in Denver, Colorado, under the rules of the American Arbitration Association. If FSI is not involved, the arbitration will take place within the area where the Fat Shack restaurant is located, using an arbitration group acceptable to both the franchisee and the Associate. This arbitration clause does not apply to actions for injunctive relief related to Section 7 of the agreement, which FSI or the franchisee can pursue in court or arbitration.