What aspect of Fat Shack franchise operations is covered in Section 7 of the Franchise Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
6.1. During the term of this Development Agreement, Franchisee and its officers, partners, directors, agents or employees who have completed FSI's training programs or had access to the
Operations Manual, as described in the Initial Franchise Agreement, and/or the beneficial owners of a 5 percent or greater interest in Franchisee and their respective immediate families, shall be subject to all restrictive covenants as set forth in the Initial Franchise Agreement and in any Nondisclosure and Noncompetition Agreements executed in conjunction with the Initial Franchise Agreement, which covenants by this reference are incorporated herein. Upon termination or expiration of this Development Agreement, Franchisee and its officers, partners, directors, agents or employees who have completed FSI's training programs or had access to the Operations Manual, as described in the Initial Franchise Agreement, and/or the beneficial owners of a 5 percent or greater interest in Franchisee and their respective immediate families, shall be subject to all restrictive covenants as set forth in the franchise agreement related to the last FAT SHACK Restaurant being operated by Franchisee, and in any Nondisclosure and Noncompetition Agreements executed in conjunction with such franchise agreement.
7. BUSINESS RELATIONSHIPS
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, Section 7 of the Development Agreement pertains to business relationships. Specifically, during the term of the Development Agreement, the franchisee, along with their officers, partners, directors, agents, or employees who have completed Fat Shack's training programs or had access to the Operations Manual, and/or the beneficial owners of a 5 percent or greater interest in the franchisee and their immediate families, are subject to restrictive covenants. These covenants are detailed in the Initial Franchise Agreement and any Nondisclosure and Noncompetition Agreements associated with it. These covenants are incorporated by reference into the Development Agreement.
Upon termination or expiration of the Development Agreement, these restrictive covenants continue to apply. The franchisee and the aforementioned individuals are then subject to the restrictive covenants outlined in the franchise agreement related to the last Fat Shack Restaurant operated by the franchisee, as well as any Nondisclosure and Noncompetition Agreements executed with that franchise agreement.
This means that individuals associated with the Fat Shack franchise are bound by certain restrictions, such as non-competition clauses, both during the term of the Development Agreement and after its termination or expiration. These restrictions are designed to protect Fat Shack's business interests and prevent franchisees from using confidential information or competing with the franchise system. Prospective franchisees should carefully review these covenants and agreements to understand the scope and duration of these restrictions before entering into a franchise agreement.