In the event of a Fat Shack franchisee's default under other agreements, what determines the cure period?

According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee defaults under agreements other than the Franchise Agreement, the cure period is determined by the time periods specified in those other agreements. This means that if a Fat Shack franchisee has, for example, a lease agreement or a development agreement with differing cure periods, the specific terms of those agreements will dictate how long the franchisee has to correct the default.

This is a critical point for prospective Fat Shack franchisees to understand. It highlights the importance of carefully reviewing all agreements associated with the franchise, not just the Franchise Agreement itself. Franchisees must be aware of the default and cure provisions in each agreement to avoid potential termination of their franchise rights. The Fat Shack franchise agreement can be terminated if the franchisee does not cure the default within the time period outlined in the other agreements.

For example, if a franchisee has a loan agreement with a bank that requires a 15-day cure period for a payment default, and the franchisee fails to make a payment, they would only have 15 days to cure that default. Failure to do so could trigger a cross-default under the Fat Shack Franchise Agreement, potentially leading to termination. Therefore, franchisees need to maintain meticulous records and adhere to the terms of all related agreements to ensure compliance and avoid jeopardizing their franchise.