What constitutes a breach of the Fat Shack franchise agreement in relation to the death or permanent disability of the franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
reasonable time, not to exceed 120 days from the date of death or permanent disability (unless extended by probate proceedings), and shall be subject to all terms and conditions applicable to transfers contained in this Article 17. For purposes of a transfer made pursuant to this Section 17.6, there shall be no transfer fee charged by FSI; provided that FSI reserves the right to charge tuition for any training necessitated by the transfer. Failure to transfer the interest within said period of time shall constitute a breach of this Agreement. The term "permanent disability" shall mean a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee (or an owner controlling a Franchisee entity) from supervising the management and operation of the FAT SHACK Restaurant for a period of 120 days from the onset of such disability, impairment or condition. In any event, the FAT SHACK Restaurant shall at all times be managed by a General Manager who has complied with all of FSI's training requirements, regardless of any death or permanent disability covered by this Section 17.6.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, a failure to transfer the franchise interest within a specified timeframe after the death or permanent disability of the franchisee constitutes a breach of the franchise agreement. The agreement stipulates that the franchisee's interest must be transferred within 120 days from the date of death or permanent disability. This period may be extended by probate proceedings.
The term "permanent disability" is defined as a mental or physical condition that prevents the franchisee (or an owner controlling the franchisee entity) from supervising the Fat Shack restaurant's management and operation for 120 days from the onset of the disability. However, the Fat Shack restaurant must always be managed by a General Manager who has met Fat Shack's training requirements, regardless of any death or permanent disability.
In the event of death or permanent disability, Fat Shack will not charge a transfer fee. However, Fat Shack retains the right to charge tuition for any training required due to the transfer. This provision ensures that the restaurant continues to operate under qualified management even if the original franchisee is no longer able to manage the business.