Does Fat Shack currently derive revenue from proprietary software licensed to franchisees?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to develop and license to you proprietary software for which we could derive revenue, although we have not developed any at this time.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack does not currently derive revenue from proprietary software licensed to franchisees. However, Fat Shack reserves the right to develop and license proprietary software to franchisees in the future, from which they could derive revenue.
Currently, Fat Shack franchisees are required to purchase a designated Point of Sale (POS) system that meets Fat Shack's specifications. The approved POS system is the Toast POS System, customized for Fat Shack restaurants by a designated supplier not affiliated with Fat Shack. Franchisees must also purchase hardware and software maintenance and update services for the POS system from the designated supplier throughout the term of their Franchise Agreement.
While Fat Shack has not developed proprietary software as of the date of the 2025 FDD, the company retains the right to do so in the future. If Fat Shack develops and licenses proprietary software, franchisees may be required to adopt it, potentially incurring additional costs. This is a common practice in franchising, as franchisors often seek to standardize operations and generate additional revenue streams through technology.