What is a condition of FSI's approval of a transfer of the Fat Shack Development Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
A condition of FSI's approval of a transfer of this Development Agreement is that Franchisee must transfer all of its interest under this Development Agreement, and shall not be permitted to transfer any portion of this Development Agreement separate and apart from the remainder of this Development Agreement.
Any transfer shall include the rights to all Franchise Agreements entered into between FSI and Franchisee hereunder.
Franchisee and the transferee shall comply with the requirements under each Franchise Agreement entered into between FSI and Franchisee for the transfer of each such Franchise Agreement, including the payment of the applicable transfer fee for each Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a condition of FSI's approval for a transfer of the Development Agreement is that the franchisee must transfer their entire interest in the Development Agreement. The franchisee is not allowed to transfer only a portion of the agreement.
This means that if a franchisee wishes to sell their development rights, they must sell all of them, not just the rights to develop certain locations or a specific area. This ensures that Fat Shack maintains control over the development of its franchises and avoids a fragmented approach to expansion within a given territory.
Furthermore, any transfer must include the rights to all Franchise Agreements already established between FSI and the franchisee. The franchisee and the new transferee must also meet all requirements for transferring each individual Franchise Agreement, including paying the necessary transfer fees for each one. This requirement ensures that all existing Fat Shack restaurants operating under the Development Agreement are properly transferred and that all associated fees are paid.