How does Fat Shack collect the Marketing and Promotion fee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty1 | 6% of your Gross Sales2 | Payable weekly on Tuesday of each week based on the prior week's Gross Sales | The Royalty is for the ongoing grant of the rights to use the Marks and Licensed Methods, and on-going support. We will debit your bank account for the Royalty.3 You must meet minimum Sales Quota. See Item 12. |
| Marketing and Promotion Fee1 | None, but we reserve the right to charge up to 1½% of your Gross Sales2 | Payable with the Royalty Fee | We may collect a Marketing and Promotion Fee starting upon 30 days' notice to you. Once commenced, we will debit your bank account for amounts due.3 We may reallocate all or a portion of this fee to a Regional Advertising Program if one is established in your region. You must meet minimum Sales Quota. See Item 12. |
- 3 Before you open your FAT SHACK Restaurant, you must sign and deliver to us and your bank all documents needed to permit us to debit your bank account for each week's Royalty and Marketing and Promotion Fees and other payments due under the Franchise Agreement or otherwise. If you change your account or transfer your account to a different bank, you must notify us within one day, and sign and deliver to us and your bank new documents to permit us to debit your bank account within three days. However, we may require you to pay all amounts due by means other than automatic debit whenever we deem appropriate.
Source: Item 6 — Other Fees (FDD pages 15–18)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the Marketing and Promotion Fee, which Fat Shack reserves the right to charge up to 1½% of gross sales, is collected via automatic debit from the franchisee's bank account. This fee, if implemented, is payable weekly along with the Royalty Fee. Fat Shack will provide 30 days' notice before commencing the Marketing and Promotion Fee.
Prior to opening their Fat Shack restaurant, franchisees must sign and deliver documents that allow Fat Shack to debit their bank account weekly for both the Royalty and Marketing and Promotion Fees, as well as any other payments due under the Franchise Agreement. Franchisees are obligated to notify Fat Shack within one day if they change their bank account or transfer it to a different bank, and must provide new debit authorization documents within three days.
While automatic debit is the standard method, Fat Shack retains the right to require payment through alternative means whenever they deem it necessary. This provides Fat Shack with flexibility in managing payments and addressing any potential issues with automatic debits. The Marketing and Promotion Fee may be reallocated to a Regional Advertising Program if one is established in the franchisee's region, and franchisees must meet minimum sales quotas.