Does Fat Shack always pass the cost of advertising and promotional materials onto the franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Access to advertising and promotional materials as may be developed by FSI, the cost of which may be passed on to Franchisee, at FSI's option.
Franchisee agrees to conduct a grand opening advertising and promotional program for the FAT SHACK Restaurant at the time and in the manner specified by FSI. Franchisee's grand opening program will utilize the marketing and public relations programs and media and advertising materials that FSI has either developed or approved. Franchisee agrees that FSI may order and pay for some or all of the grand opening materials on behalf of Franchisee. If FSI does pay for Franchisee's grand opening expenses, FSI shall have the right to debit Franchisee's bank account or otherwise require Franchisee to reimburse FSI for such expenses not later than 60 days prior to the planned FAT SHACK Restaurant opening date.
FSI may in its sole discretion, conduct regional, national or international advertising to promote the FAT SHACK brand and system generally, and charge its franchisees for this service.
Franchisee shall be responsible for the costs of such participation.
In addition, Franchisee shall honor any coupons, gift certificates, gift cards, discounts, or other authorized promotional offers of FSI at Franchisee's sole cost unless otherwise specified in writing by FSI.
From time to time a promotion may not benefit all franchisees in the FAT SHACK system; and if the promotion is not offered in the region, or another unknown hardship arises, FSI may, at FSI's option, exempt Franchisee and/or other franchisees on a case-by-case basis.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the cost of advertising and promotional materials may be passed on to the franchisee, but not always. Fat Shack has the option to pass these costs on to the franchisee. Specifically, Fat Shack may conduct regional, national, or international advertising to promote the brand and charge franchisees for this service through a Marketing and Promotion Fee, up to a maximum of 1½ percent of the franchisee's weekly Gross Sales.
Franchisees are also required to participate in promotional campaigns and advertising programs established by Fat Shack. The franchisee is generally responsible for the costs associated with participating in these promotions. This includes honoring coupons, gift certificates, gift cards, and other authorized promotional offers at the franchisee's sole cost, unless otherwise specified in writing by Fat Shack. Fat Shack may also create a mobile device application for promotional programs, which franchisees must participate in at their own expense.
However, Fat Shack retains the right to order and pay for some or all of the grand opening materials on behalf of the franchisee. If Fat Shack pays for these grand opening expenses, it has the right to debit the franchisee's bank account or require reimbursement no later than 60 days prior to the planned opening date. Additionally, Fat Shack may, at its option, exempt a franchisee from certain promotions on a case-by-case basis if the promotion is not offered in the region or if another hardship arises.