Are the footnotes provided in the Fat Shack FDD Item 19 an integral part of the charts?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
The below footnotes are an integral part of the above charts and should be read in their entirety for a full understanding of the information contained in the charts.
- The above charts show the average annual Gross Sales generated during calendar year 2024 by our company-owned and affiliate-owned Units (in the first chart) and our Franchisee-owned Units (in the second chart) that were open and operated for the entire calendar year 2024.
- In the first chart, there are five company-owned Units that are reported, representing all of our company-owned Units that operated for the full year 2024. For purposes of this Item 19, the "companyowned" Units include those Units owned and operated by our affiliates. We did not include in this chart the results of one Unit that was owned and operated for part of the year by our affiliate and then transferred to a franchisee, since that Unit did not operate for the full year as a company-owned Unit.
Source: Item 19 — Financial Performance Representations (FDD pages 46–49)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the footnotes presented with the financial performance charts in Item 19 are considered an integral component for fully understanding the information provided. Specifically, the FDD states that the footnotes "should be read in their entirety for a full understanding of the information contained in the charts." This underscores the importance of reviewing these footnotes carefully, as they provide essential context and qualifications to the gross sales figures presented for both company-owned and franchisee-owned Fat Shack units.
The footnotes clarify that the charts present average annual Gross Sales generated during calendar year 2024 by company-owned, affiliate-owned, and franchisee-owned units that were open and operated for the entire year. For the company-owned units, the chart includes those owned and operated by Fat Shack's affiliates. The footnotes also explain that the results of one unit owned and operated by an affiliate for only part of the year, before being transferred to a franchisee, were excluded from the company-owned unit chart because it did not operate as a company-owned unit for the entire year.
For a prospective Fat Shack franchisee, this means that the financial performance data should not be evaluated in isolation. The footnotes provide crucial details about how the data was compiled, which units were included or excluded, and the specific time period covered. Ignoring these footnotes could lead to a misunderstanding of the actual financial performance of Fat Shack restaurants and potentially unrealistic expectations about future sales. Therefore, a thorough review of both the charts and their accompanying footnotes is essential for making an informed investment decision.