Does the Fat Shack franchise agreement allow franchisees to disclaim reliance on statements made by the franchisor or its representatives?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
24.2. Entire Agreement
This Agreement contains the entire agreement between the parties and supersedes any and all prior agreements concerning the subject matter hereof. Franchisee agrees and understands that FSI shall not be liable or obligated for any oral representations or commitments made prior to the execution hereof or for claims of negligent or fraudulent misrepresentation and that no modifications of this Agreement shall be effective except those in writing and signed by both parties. FSI does not authorize and will not be bound by any representation of any nature other than those expressed in this Agreement. Franchisee further acknowledges and agrees that no representations have been made to it by FSI regarding projected sales volumes, market potential, revenues, profits of Franchisee's Restaurant, or operational assistance other than as stated in this Agreement or in any Franchise Disclosure Document provided by FSI or its representatives. Any policies that FSI adopts and implements from time to time are subject to change, are not a part of this Agreement, and are not binding on FSI. Nothing in this Agreement or in any related agreement is intended to disclaim any representations made by FSI in the Franchise Disclosure Document provided to Franchisee.
24.3. Delegation by FSI
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, the franchise agreement includes an acknowledgment section where the franchisee agrees that they are not relying on any statements or representations made by Fat Shack or its representatives, except as explicitly stated in the Franchise Disclosure Document or the franchise agreement itself. This means Fat Shack franchisees are limited in their ability to claim they were induced to invest based on verbal promises or representations outside of the official documents.
This acknowledgment is a standard clause in franchise agreements. It aims to protect Fat Shack from potential misrepresentation claims based on informal communications. However, the agreement also states that nothing within it is intended to disclaim representations made within the Franchise Disclosure Document itself. This ensures that Fat Shack remains accountable for the information provided in the FDD, which is a legally required disclosure document.
For a prospective Fat Shack franchisee, this clause underscores the importance of carefully reviewing the Franchise Disclosure Document and the franchise agreement with legal counsel. It also highlights the need to document any representations made by Fat Shack during the due diligence process and to ensure that any critical promises are included in the written agreement. This helps to protect the franchisee's interests and ensures clarity regarding the terms and conditions of the franchise relationship. Furthermore, an Indiana addendum to the agreement specifies that franchisees in Indiana do not waive any rights under Indiana statutes regarding prior representations made by Fat Shack.