How can the Fat Shack agreement be changed or modified?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
CELLANEOUS PROVISIONS
24.1. Modification
- a. This Agreement may only be modified upon execution of a written agreement between FSI and Franchisee or, at FSI's option, upon notice of the approval of a Super-Majority as defined in Section 24.1.b below. Unless prohibited by law or waived by FSI, Franchisee must provide a general release of any and all claims against FSI if Franchisee requests and FSI consents to modify any provisions of this Agreement after it has been signed.
- b. This Agreement may be modified by FSI at its option whenever FSI and a Super-Majority, as hereinafter defined, of franchisees of FSI agree to the modification. A "Super-Majority" of FSI franchisees shall consist of the owners of at least 75 percent of all FAT SHACK Restaurants, or, if only a portion of FAT SHACK Restaurants are affected by the modification, at least 75 percent of those FAT SHACK Restaurants affected by the modification. Whenever a modification is approved by a Super-Majority, FSI may elect to treat the modification as effective to all franchisees or the applicable group thereof, including Franchisee, to the same extent and in the same manner as if the modification was unanimously approved by all applicable Franchisees, and regardless of whether Franchisee may or may not desire to be
bound by the modification. FSI shall provide Franchisee with notice of any modification to this Agreement based on a Super-Majority approval at least 60 days prior to the date such modification is to be effective. By signing this Agreement, Franchisee appoints the officers of FSI as its attorneys in fact with irrevocable power and authority to execute any such modification so approved.
- c. Franchisee acknowledges that FSI may modify its standards and specifications and operating, marketing, and other policies and procedures set forth in the Operations Manual unilaterally under any conditions and to the extent in which FSI, in its sole discretion, deems necessary, and Franchisee shall be bound by such modifications. These modifications may include regional and local variations. Franchisee may be obligated to invest additional capital in Franchisee's FAT SHACK Restaurant and incur higher operating costs based on these periodic modifications.
- d. FSI has the right to vary the franchise agreement and any standards, specifications, and techniques for a particular FSI franchisee based on the circumstances related to the franchisee, its area or territory, or any other condition. Franchisee shall not be entitled to require FSI to grant Franchisee a similar variation.
24.2. Entire Agreement
This Agreement contains the entire agreement between the parties and supersedes any and all prior agreements concerning the subject matter hereof. Franchisee agrees and understands that FSI shall not be liable or obligated for any oral representations or commitments made prior to the execution hereof or for claims of negligent or fraudulent misrepresentation and that no modifications of this Agreement shall be effective except those in writing and signed by both parties. FSI does not authorize and will not be bound by any representation of any nature other than those expressed in this Agreement. Franchisee further acknowledges and agrees that no representations have been made to it by FSI regarding projected sales volumes, market potential, revenues, profits of Franchisee's Restaurant, or operational assistance other than as stated in this Agreement or in any Franchise Disclosure Document provided by FSI or its representatives. Any policies that FSI adopts and implements from time to time are subject to change, are not a part of this Agreement, and are not binding on FSI. Nothing in this Agreement or in any related agreement is intended to disclaim any representations made by FSI in the Franchise Disclosure Document provided to Franchisee.
24.3. Delegation by FSI
From time to time, FSI shall have the right to delegate the performance of any portion or all of its obligations and duties hereunder to third parties, whether the same are agents of FSI or Area Representatives or independent contractors which FSI has contracted with to provide such services.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchise agreement can be modified in a few specific ways. Firstly, Fat Shack and the franchisee can execute a written agreement to modify the terms. However, if the franchisee requests a modification after the agreement has been signed, Fat Shack may require a general release of any and all claims against them, unless prohibited by law or waived by Fat Shack.
Alternatively, Fat Shack can modify the agreement if a "Super-Majority" of franchisees agree to the modification. A Super-Majority is defined as at least 75% of all Fat Shack restaurants, or if the modification only affects a portion of restaurants, at least 75% of those affected. If a Super-Majority approves a modification, Fat Shack can elect to make it effective for all franchisees, regardless of whether an individual franchisee desires to be bound by it. Fat Shack must provide franchisees with at least 60 days' notice before any modification based on Super-Majority approval becomes effective. By signing the agreement, the franchisee appoints the officers of Fat Shack as their attorneys in fact with the power to execute any such modification.
Fat Shack also retains the right to unilaterally modify its standards, specifications, and operating, marketing, and other policies and procedures set forth in the Operations Manual. These modifications can include regional and local variations, and the franchisee is bound by them. These changes may require the franchisee to invest additional capital in their Fat Shack Restaurant and incur higher operating costs. Fat Shack also has the right to vary the franchise agreement and any standards, specifications, and techniques for a particular Fat Shack franchisee based on their specific circumstances, area, or territory, and the franchisee is not entitled to require Fat Shack to grant them a similar variation.
It is important to note that the franchise agreement represents the entire agreement between the parties and supersedes any prior agreements. Any modifications must be in writing and signed by both parties to be effective. Fat Shack is not liable for any oral representations or commitments made prior to the execution of the agreement, and franchisees should not rely on any representations other than those expressed in the agreement or the Franchise Disclosure Document.