What costs can Fat Shack include in transfer fees in Washington?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
orporated herein by reference.
- 5.3. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee and/or the proposed transferee shall pay to FSI the standard transfer fee for each franchise agreement to be transferred, as governed by such franchise agreement executed pursuant to this Development Agreement, plus $5,000.00 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This sum shall be payable in lump sum to FSI as one of the preconditions to obtaining FSI's written consent to any proposed transfer. In the event of transfer, the transferee shall pay the remaining portions of the Initial Franchise Fees owed to FSI, when each Subsequent Franchise Agreement is signed. Transfer fees paid to FSI will not be applied to the Initial Franchise Fees due, but the transferee will receive credit for Franchisee's earlier payment of the Development Fees.
- 5.4. 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.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, in the event of a transfer of a franchise agreement, the franchisee or the proposed transferee must pay Fat Shack a standard transfer fee for each franchise agreement being transferred. In addition to the standard transfer fee, a franchisee must also pay $5,000 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This total sum is payable in a lump sum to Fat Shack as a precondition to obtaining Fat Shack's written consent for the proposed transfer.
Furthermore, the transferee is responsible for paying any remaining portions of the Initial Franchise Fees owed to Fat Shack when each Subsequent Franchise Agreement is signed. It is important to note that transfer fees paid to Fat Shack will not be applied to the Initial Franchise Fees due. However, the transferee will receive credit for the franchisee's earlier payment of the Development Fees.
Additionally, unless waived or reduced by Fat Shack, the franchisee must provide a plan for the proposed transferee to receive a minimum of 10 days of on-site assistance. If Fat Shack provides this assistance, the franchisee or transferee must pay Fat Shack $500 for each day of assistance, which is in addition to the transfer fee. These stipulations ensure that Fat Shack is compensated for its role in facilitating the transfer and for any potential loss of future franchise development fees, while also ensuring the new franchisee is adequately trained.