Who is the Director of the Division of Insurance that Fat Shack appoints in South Dakota?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall procure, maintain and provide evidence of insurance for the FAT SHACK Restaurant and its operations, of the types, in the amounts, and with such terms and conditions as FSI may from time to time prescribe, in the Operations Manual or otherwise.
All of the required policies of insurance shall show FSI as an additional insured and shall provide for 30-day advance written notice to FSI of cancellation or modification.
- q.
Franchisee will provide proof of insurance to FSI prior to commencement of operations at its FAT SHACK Restaurant and proof of workers compensation insurance prior to sending any employee to the training program described in Article 7.
This proof will show that the insurer has
been authorized to inform FSI in the event any policies lapse or are cancelled. FSI has the right to change the types and minimum amount of insurance Franchisee is required to maintain by giving Franchisee prior notice. Noncompliance with the insurance provisions set forth herein shall be deemed a material breach of this Agreement; in the event of any lapse in insurance coverage, in addition to all other remedies, FSI shall have the right to demand that Franchisee cease operations of the FAT SHACK Restaurant until coverage is reinstated or, alternatively, pay any delinquencies in premium payments and charge the same to Franchisee.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
Based on the 2025 Fat Shack Franchise Disclosure Document excerpts provided, there is no mention of a specific Director of the Division of Insurance appointed by Fat Shack in South Dakota, or any state. However, the FDD does discuss Fat Shack's requirements for franchisees to maintain insurance.
Item 23 outlines that franchisees must procure and maintain insurance for their Fat Shack restaurant, with the types, amounts, terms, and conditions dictated by Fat Shack Inc. (FSI) as specified in the Operations Manual or otherwise. These insurance policies must list FSI as an additional insured and provide them with a 30-day advance written notice of any cancellation or modification. Franchisees must provide proof of insurance to FSI before starting operations and proof of workers' compensation insurance before sending any employee to the training program.
The FDD also states that FSI has the right to modify the required types and minimum amounts of insurance with prior notice to the franchisee. Failure to comply with these insurance requirements constitutes a material breach of the Franchise Agreement, potentially leading to a cessation of operations until coverage is reinstated or FSI covering any premium delinquencies at the franchisee's expense. A prospective franchisee should ask Fat Shack directly who their approved insurance providers are and what specific coverage levels are mandated.