Is the Fat Shack agreement binding on Associate if it is not signed by FSI or Company?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
SCLOSURE AND NONCOMPETITION AGREEMENT
This Nondisclosure and Noncompetition Agreement (this "Agreement") is made and entered into effective as of the date set forth on the signature page hereof, by and among FAT SHACK INC., a Delaware corporation ("FSI") located at 420 East 58th Avenue, Suite 128B, Denver, Colorado 80216, the undersigned franchisee ("Company"), and the undersigned associate of Company ("Associate").
RECITALS
- A. FSI is engaged in the business of establishing, operating, franchising, and promoting specialty quick service sandwich restaurants under the name Fat Shack® that features "Fat Sandwiches," burgers and wings, together with appetizers, desserts, hot and cold beverages, and related merchandise, for dine in, takeout and delivery, and specializes in late night delivery of its products to its customers ("FAT SHACK Restaurants") associated with the service mark "FAT SHACK" and other logos, trademarks, service marks and commercial symbols and the Franchisor's proprietary methods of doing business ("Licensed Methods").
- B. FSI and its affiliates have developed proprietary methods for establishing, operating and promoting FAT SHACK Restaurants utilizing certain confidential information as more fully described herein, and have established substantial goodwill and an excellent reputation with respect to the quality of the products and services available in a FAT SHACK Restaurant, which goodwill and reputation have been and will continue to be of major benefit to FSI.
- C. Company is a franchisee under an effective franchise agreement, development agreement, or both, with FSI (as applicable, the "Franchise Agreement").
- D. Associate is or will become involved with Company in the capacity of an officer, partner, director, manager, agent, employee, member, Managing Owner, Designated Manager (as defined in the Franchise Agreement), beneficial owner, or independent contractor (such capacities collectively referred to as "Affiliation") or is related to a person who has an Affiliation with Company, and will become privileged as to certain confidential information related to FSI, its operations, the FAT SHACK Restaurants and/or the Licensed Methods.
- E.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
Based on the 2025 Fat Shack Franchise Disclosure Document, the Nondisclosure and Noncompetition Agreement requires the Associate, Fat Shack Inc. (FSI), and the franchisee (Company) to enter into the agreement. The agreement explicitly states that all three parties—Associate, Company, and FSI—have reached an understanding regarding nondisclosure and noncompetition. The document further states that all parties involved are intending to be legally bound to the agreement.
For the agreement to be effective, it requires the mutual promises and considerations from all parties involved, including the Associate, the Company (franchisee), and FSI. The agreement outlines that the Associate is or will become involved with the Company in some capacity and will have access to confidential information related to FSI. This access to confidential information is contingent upon the Associate entering into the agreement with both FSI and the Company.
Therefore, based on the recitals and the structure of the Nondisclosure and Noncompetition Agreement, it is implied that the agreement is intended to be binding on the Associate only if it is also signed by both FSI and the Company. The agreement is designed to protect FSI's confidential information and proprietary rights, and the Company's right to use that information, making the signatures of all three parties essential for its enforceability.