What is the Development Fee for each additional Fat Shack Restaurant to be opened under the Development Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
OPMENT FEE AND INITIAL FRANCHISE FEES
- 2.1. Concurrently with the execution of this Development Agreement, Franchisee will pay FSI as consideration for the development rights granted herein, in addition to the initial franchise fee ("Initial Franchise Fee") for the first FAT SHACK Restaurant under the Initial Franchise Agreement, an amount set forth in the Addendum ("Development Fee") equal to $5,000 for each additional FAT SHACK Restaurant to be opened hereunder.
- 2.2. Franchisee will be required to pay a total Initial Franchise Fee of $18,000 for the second and each subsequent FAT SHACK Restaurant to be developed pursuant to this Development Agreement. FSI will credit the $5,000 portion of the Development Fee attributable to each of the second and subsequent FAT SHACK Restaurants to be developed under this Development Agreement to the Initial Franchise Fee due under the Franchise Agreement for such FAT SHACK Restaurant (individually, the "Subsequent Franchise Agreement" or collectively, the "Subsequent Franchise Agreements"). The balance of the Initial Franchise Fee for each of the second and subsequent FAT SHACK Restaurants to be developed will be due at the earlier of (1) the date set forth in Paragraph 4 of the Addendum which is the deadline for signing the Franchise Agreement for that particular FAT SHACK Restaurant; or (2) the date which Franchisee signs a Subsequent Franchise Agreement for the FAT SHACK Restaurant to be developed.
- 2.3. Other than to have applied the portions of the Development Fee to a portion of the Initial Franchise Fee for Subsequent Franchise Agreements, the amounts paid pursuant to this Development Agreement are nonrefundable once paid to FSI. Under no circumstances will Franchisee be entitled to a refund, return or rebate of any port
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee must pay a Development Fee of $5,000 for each additional Fat Shack Restaurant to be opened under the Development Agreement. This fee is paid concurrently with the execution of the Development Agreement, in addition to the initial franchise fee for the first Fat Shack Restaurant.
The Development Fee contributes to the Initial Franchise Fee for each subsequent Fat Shack Restaurant developed under the Development Agreement. Specifically, the franchisee will be required to pay a total Initial Franchise Fee of $18,000 for the second and each subsequent Fat Shack Restaurant. Fat Shack will credit the $5,000 Development Fee towards this $18,000 Initial Franchise Fee. The balance of the Initial Franchise Fee is due either by the date specified in the Addendum for signing the Franchise Agreement or when the franchisee signs a Subsequent Franchise Agreement.
It is important to note that the Development Fees paid to Fat Shack are nonrefundable, except to have applied the portions of the Development Fee to a portion of the Initial Franchise Fee for Subsequent Franchise Agreements. Under no circumstances will a franchisee be entitled to a refund, return, or rebate of any portion of the Development Fee once it has been paid to Fat Shack.