What is a condition to closing the purchase of the Fat Shack Restaurant by Fat Shack, Inc. (FSI)?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- d.
Franchisee agrees that it shall be obligated to operate the FAT SHACK Restaurant, according to the terms of this Agreement, during the period in which FSI is deciding whether to exercise its option to purchase and until the closing takes place, and that a condition to closing is that the FAT SHACK Restaurant has remained open during that time period.
FSI may decide not to exercise its option to purchase at any time before closing if it determines that any of the conditions noted above have not been or cannot be satisfied.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a condition to closing the purchase of a Fat Shack restaurant by Fat Shack, Inc. (FSI) is that the Fat Shack Restaurant has remained open during the period in which FSI is deciding whether to exercise its option to purchase and until the closing takes place.
This means that if Fat Shack decides it wants to buy back a franchise location, the franchisee is obligated to keep the restaurant operating according to the franchise agreement until the sale is finalized. If the restaurant closes during this period, Fat Shack may not proceed with the purchase.
This condition protects Fat Shack by ensuring that the restaurant remains a viable business up to the point of sale. It prevents a franchisee from ceasing operations and potentially devaluing the business before Fat Shack takes ownership. For a franchisee, this means they must continue to invest time and resources into the business even while a potential sale is pending, which could be a financial risk if the sale does not ultimately go through.