Does Fat Shack currently require franchisees to spend a specific amount on advertising?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Local Advertising. Currently, we do not require franchisees to conduct any specific advertising of their FAT SHACK Restaurants, although we recommend that that they do advertise their businesses. Although we currently do not require you to expend a specific amount or percentage of your Gross Sales on advertising, we reserve the right to do so in the future. In that event, you will be required to submit regular reports to us accounting for the use of these funds. If a Regional Advertising program in your area is established, as discussed below, we may allocate a portion of your local advertising amounts to the Regional Advertising program.
If you propose to use any advertising not previously developed or approved by us, you must submit the proposed advertising to us for review and approval or, if necessary, modification, at your cost. You are responsible for the costs of printing all materials and any proposed supplier of printing services must be first approved by us. All advertising and promotion of your FAT SHACK Restaurant must also be in such media and of such type and format as we must first approve in writing, and it must be conducted in a dignified manner and must conform to the standards and requirements as we or our designated vendor may specify. Any proposed written advertising or a description of a marketing or promotional program not previously approved by us must be submitted to us at least 10 days prior to publication, broadcast or use.
We do not require Franchisees to participate in a local or regional advertising cooperative, although we reserve the right to do so in the future. We have not established any rules or regulations related to local or regional advertising cooperatives.
We are not required to spend any amount on advertising in area or territory where your FAT SHACK Restaurant is located.
Marketing and Promotion Fund Contribution. We currently do not collect a Marketing and Promotion Fee, nor have we established a National Marketing and Promotion Fund or program. However, upon not less than 30 days' notice, we may require you to remit to us a Marketing and Promotion Fee of up to 1½ percent of Gross Sales. We may change the percentage of the Marketing and Promotion Fee upon 30 days' notice, but not above 1½ percent of Gross Sales. The Marketing and Promotion Fee is due to us along with your Royalty Fee payment, payable weekly by automatic transfer on Tuesday of each week, based on the amount of Gross Sales in the previous week. The Marketing and Promotion Fee will be placed in a separate account ("Marketing and Promotion Fund") will be accounted for separately. All company-owned and affiliate-owned FAT SHACK Restaurants will pay into the Marketing and Promotion Fund on an equal percentage basis with all franchised FAT SHACK Restaurants.
Once established, we will administer the Marketing and Promotion Fund in our sole discretion. We may use the Marketing and Promotion Fund for the creation, production and placement of commercial advertising, agency costs and commissions, creation and production of video, audio, and written advertisements, including direct mail, radio and other media advertising, the establishment and operation of gift card and loyalty card programs, Internet advertising of FAT SHACK Restaurants, employing advertising agencies and in-house staff assistance, supporting public relations, market research and other advertising and marketing activities. We may also use the Marketing and Promotion Fund for product development and menu changes. We will not spend the Marketing and Promotion Fund's money on advertising that is principally the solicitation for the sale of franchises.
We may reimburse ourselves from the Marketing and Promotion Fund for administrative costs, salaries and overhead expenses related to the administration of the Marketing and Promotion Fund and its
marketing programs, including conducting market research, preparing material and collecting and accounting for Marketing and Promotion Fund contributions.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–36)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, franchisees are not currently required to conduct specific advertising for their Fat Shack restaurants. While Fat Shack recommends that franchisees advertise their businesses, they do not mandate a specific amount or percentage of gross sales to be spent on advertising. However, Fat Shack retains the right to institute such a requirement in the future, at which point franchisees would need to submit regular reports accounting for the use of these advertising funds.
Fat Shack also does not currently require franchisees to participate in local or regional advertising cooperatives, but reserves the right to do so in the future. If a regional advertising program is established in a franchisee's area, Fat Shack may allocate a portion of the franchisee's local advertising amounts to that regional program. Any advertising materials not previously developed or approved by Fat Shack must be submitted for review and approval, with the franchisee bearing the costs of any necessary modifications and printing.
While Fat Shack does not currently collect a marketing and promotion fee or have a national marketing and promotion fund, they may, with 30 days' notice, require franchisees to remit a marketing and promotion fee of up to 1½ percent of gross sales. This fee would be payable weekly via automatic transfer, alongside royalty fees. The funds collected would be placed in a separate account and used for various marketing and advertising activities, including commercial advertising, agency costs, internet advertising, and market research. Fat Shack may also reimburse themselves for administrative costs related to the fund's administration.
It is important for prospective franchisees to note that Fat Shack has no obligation to spend any amounts on advertising in a franchisee's protected territory, nor do they have a fiduciary obligation to franchisees regarding the administration of the marketing and promotion fund. This means that while franchisees may be required to contribute to advertising efforts, there is no guarantee that those efforts will directly benefit their specific location.