Does the Fat Shack agreement require arbitration for controversies, disputes, or claims?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
ompany is located.
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- Arbitration. Any and all controversies, disputes or claims between FSI, its subsidiaries and affiliated companies or their shareholders, members, managers, officers, directors, agents, employees and attorneys (in their representative capacity); Company, its shareholders, members, managers, officers,
directors, agents and employees; and/or Associate arising out of or related to this Agreement or the validity hereof shall be submitted for binding arbitration; except for actions for injunctive relief pursuant to Section 7, which actions FSI and/or Company at their option may bring either in a court of competent jurisdiction or in arbitration. If FSI is a party to any controversy, dispute or claim, such arbitration proceedings shall be conducted in Denver, Colorado, will be submitted to the Judicial Arbiter Group, will be heard by one arbitrator in accordance with the then current rules of the American Arbitration Association ("AAA") applicable to commercial arbitration, and the arbitrator shall be a resident of the State of Colorado knowledgeable of Colorado law and fluent in English. The arbitration proceeding and all other hearings shall be conducted in English only, although Associate shall have the right, at Associate's option and sole expense, to have a translator present at the proceeding or other hearings. If FSI is not a party to such controversy, dispute or claim, such arbitration proceedings shall be conducted within the area in which Company's FAT SHACK Restaurant is based and will be heard by one arbitrator in accordance with the then current commercial arbitration rules of any arbitration group mutually acceptable to Company and Associate, and if Company and Associate cannot agree on an arbitration group within 30 days after demand for arbitration, then the AAA shall conduct such arbitration in accordance with its then current commercial arbitration rules. All jurisdictional issues will be decided by the arbitrator.
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- Attorneys' Fees. If FSI or Company must enforce any of the provisions or rights under this Agreement in any action at law or in equity and if Company and/or FSI is successful in such litigation or arbitration as determined by the court or arbitrator in a final judgment or decree taking into consideration the merits of the claims asserted by each party, then Associate shall pay FSI or Company, as applicable, all costs, expenses and reasonable attorneys' fees incurred by FSI and/or Company (including without limitation such costs, expenses and fees on any appeals), and if FSI and/or Company receives a judgment in any such action or proceeding, such costs, expenses and attorneys' fees shall be included as part of such judgment.
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- Definitions. All capitalized terms not defined in this Agreement have the respective meanings set forth in the effective Franchise Agreement between Company and FSI.
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- Cross Default. A default by Associate under this Agreement will be deemed a default of all agreements between Company and FSI, unless waived by FSI in writing.
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- Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and via electronic signatures.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
| STATE | STATE ADMINISTRATOR | AGENT FOR SERVICE OF PROCESS |
|---|---|---|
| RHODE ISLAND | State of Rhode Island and Providence Plantations Department of Business Regulation Securities Division 1511 Pontiac Avenue John O. Pastore Complex - Building 69-1 Cranston, Rhode Island 02920 (401) 462-9500 | Director of Rhode Island Department of Business Regulation Same Address |
| SOUTH DAKOTA | South Dakota Division of Insurance Securities Regulation 124 S Euclid, Suite 104 Pierre, South Dakota 57501 (605) 773-3563 | Director of South Dakota Division of Insurance Same Address |
| TEXAS | Secretary of State Statutory Documents Section James E. Rudder Building 1019 Brazos Street Austin, Texas 78701 P.O. Box 13550 Austin, Texas 78711 (512) 463-5705 | None |
| UTAH | Utah Department of Commerce Consumer Protection Division 160 East 300 South, 2nd Floor Salt Lake City, UT 84114 801-530-6601 | Same |
| VIRGINIA | State Corporation Commission Division of Securities and Retail Franchising 1300 E. Main Street, 9th Floor Richmond, Virginia 23219 (804) 371-9051 | Clerk of the State Corporation Commission State Corporation Commission 1300 E. Main Street, 1st Floor Richmond, Virginia 23219 (804) 371-9733 |
| WASHINGTON | Department of Financial Institutions Securities Division P.O. |
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, the franchise agreement mandates binding arbitration for most controversies, disputes, or claims. This applies to issues between Fat Shack Franchising International (FSI), its related entities, and the franchisee (referred to as Company/Associate), including their respective stakeholders, arising from the franchise agreement. However, there is an exception for actions seeking injunctive relief, which Fat Shack or the franchisee can pursue in a court of law or through arbitration at their discretion.
If Fat Shack is a party to the dispute, the arbitration will occur in Denver, Colorado, and be managed by the Judicial Arbiter Group. A single arbitrator, fluent in English and knowledgeable in Colorado law, will handle the proceedings according to the American Arbitration Association (AAA) rules for commercial arbitration. The franchisee can have a translator present at their own expense. If Fat Shack is not directly involved, the arbitration will take place within the Fat Shack restaurant's area and be governed by the commercial arbitration rules of a mutually agreed-upon arbitration group. If an agreement on the arbitration group cannot be reached within 30 days, the AAA will conduct the arbitration.
The document also specifies that the United States Federal Arbitration Act governs the enforceability of the arbitration sections and the confirmation of any arbitration awards. The venue for legal proceedings not subject to mandatory arbitration is the state and federal courts of Colorado. Franchisees also waive their rights to a jury trial if a claim may be brought in court.