For what duration of abandonment of the Fat Shack Restaurant will FSI consider the franchise agreement terminated?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
FSI may assume the FAT SHACK Restaurant's management under the following circumstances:
- a. if Franchisee abandons the FAT SHACK Restaurant; or
- b. if Franchisee fails to comply with any provision of this Agreement and does not cure the failure within the time period FSI specifies in its notice to Franchisee.
The exercise of FSI's rights under subparagraphs a. and b. above will not affect FSI's right to terminate this Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
The 2025 Fat Shack Franchise Disclosure Document does not specify a particular duration of abandonment that would trigger termination of the franchise agreement. However, it does state that if a franchisee abandons the Fat Shack Restaurant, FSI has the right, but not the obligation, to enter the premises and assume management of the restaurant for up to 90 days. FSI can renew its management of the Fat Shack Restaurant up to three times for an additional 90 days each time.
According to the FDD, the exercise of FSI's right to assume management due to abandonment does not affect FSI's right to terminate the agreement. This suggests that while FSI can step in to manage an abandoned restaurant, they may also choose to terminate the franchise agreement separately. The FDD also indicates that any termination by the franchisee not in accordance with the outlined procedure will be deemed a termination by the franchisee without cause, and the restaurant will be considered abandoned.
Since the FDD does not provide a specific timeframe defining abandonment, it is important for a prospective franchisee to seek clarification from Fat Shack regarding what constitutes abandonment and the specific consequences, including potential termination of the franchise agreement. Understanding Fat Shack's criteria for abandonment is crucial for franchisees to avoid unintentional violations of the agreement and potential loss of their franchise.