What is the condition for an action or proceeding against Fat Shack to be considered properly venued in a state?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, as specified in Section 22.1, involving Franchisee, and the Franchisee Affiliates, on the one side, and FSI and the FSI Affiliates, on the other side, both parties agree that the exclusive venue for disputes between them shall be in the state and federal courts of Colorado, and each waive any objection either may have to the personal jurisdiction of or venue in the state and federal courts of Colorado. Notwithstanding the foregoing, any legal proceeding by FSI or any FSI Affiliate not subject to mandatory arbitration may be brought in any court of competent jurisdiction in the country, state, province, or other geographic area in which the FAT SHACK Restaurant is located or in which Franchisee or any Franchisee Affiliate resides or owns assets.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, involving the franchisee and Fat Shack, both parties agree that the exclusive venue for disputes will be in the state and federal courts of Colorado. Both parties also waive any objection to the personal jurisdiction of or venue in the state and federal courts of Colorado.
However, there is an exception to this rule. Any legal proceeding by Fat Shack or its affiliates not subject to mandatory arbitration may be brought in any court of competent jurisdiction in the country, state, province, or other geographic area in which the Fat Shack Restaurant is located or in which the franchisee or any franchisee affiliate resides or owns assets. This means that Fat Shack retains the right to sue a franchisee in the franchisee's home state or where the restaurant is located, while the franchisee is generally required to pursue legal action against Fat Shack in Colorado.
This venue selection has significant implications for prospective Fat Shack franchisees. It means that franchisees may have to bear the expense and inconvenience of traveling to Colorado for any legal disputes with Fat Shack. It is important for potential franchisees to understand this clause and consider the potential costs and burdens before investing in a Fat Shack franchise.