What events constitute a 'Condemnation or Casualty' that a Fat Shack franchisee must report?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must immediately notify FSI of the occurrence of any (i) taking of any portion of the Restaurant Location by eminent domain, or (ii) any fire or other casualty damage to the Restaurant Location or Franchisee's FAT SHACK Restaurant (either, a "Condemnation or Casualty"). If, in FSI's business judgment, the Condemnation or Casualty is significant enough to render the continued operation of Franchisee's FAT SHACK Restaurant from the Restaurant Location in accordance with FSI's standards and specifications impractical, then Franchisee shall have 90 days from the date of the Condemnation or Casualty to (i) select a new location to serve as the Restaurant Location, (ii) obtain FSI's approval of the location and the lease or purchase agreement in accordance with Article 6, which shall require that Franchisee pay FSI Lease Review Fee if the number of leases and purchase agreements presented for FSI's review exceeds two, and (iii) recommence operations of Franchisee's FAT SHACK Restaurant at the new Restaurant Location. If Franchisee fails to recommence operations at an approved Restaurant Location during this 90-day period, FSI may terminate this Agreement upon written notice to Franchisee. If the Condemnation or Casualty, in FSI's business judgment, is not significant enough to render the continued operation of Franchisee's FAT SHACK Restaurant from the Restaurant Location in accordance with FSI's standards and specifications impractical, then Franchisee will use its best efforts to make all necessary repairs as soon as possible to make the Restaurant Location and Franchisee's FAT SHACK Restaurant conform to their condition, character and appearance immediately before such Condemnation or Casualty, according to the standards and specifications of FSI.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a "Condemnation or Casualty" that a franchisee must report immediately to Fat Shack, Inc. (FSI) includes two specific scenarios. The first is any taking of any portion of the Restaurant Location by eminent domain. Eminent domain refers to the right of a government or its agent to expropriate private property for public use, even if the owner does not wish to sell it. The second is any fire or other casualty damage to the Restaurant Location or the franchisee's Fat Shack Restaurant.
If Fat Shack determines that the Condemnation or Casualty is significant enough to make continued operation at the current location impractical, the franchisee has 90 days to select a new location, obtain Fat Shack's approval for the new location and lease or purchase agreement, and recommence operations at the new location. Failing to do so may result in termination of the Franchise Agreement by Fat Shack. If the event is not significant enough to render continued operation impractical, the franchisee is expected to make all necessary repairs to restore the Restaurant Location and Fat Shack Restaurant to its condition before the event, adhering to Fat Shack's standards and specifications.
This requirement ensures that Fat Shack is promptly informed of events that could significantly impact a franchise location's viability or brand standards. The franchisee bears the responsibility of quickly addressing such situations, either by restoring the location or finding a new one, subject to Fat Shack's approval. The 90-day window to relocate and resume operations is a critical timeframe for franchisees to manage, as failure to meet this deadline can lead to termination of the agreement.