Must a Fat Shack franchisee abide by Fat Shack's advertising policies related to advertising prices?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless prohibited by applicable law, we may periodically set a maximum or minimum price that you may advertise and charge for products and services offered by your FAT SHACK Restaurant. If we establish a maximum price for any products or services, you shall not offer or sell those products or services at any greater price. If we establish a minimum price for any products or services, you shall not offer or sell those products or services at any lesser price. In that case, any prices that we recommend to you are merely recommendations and you may establish your own prices, which may be higher or lower than our recommended prices. If we do not establish pricing limits, we may establish suggested prices. You must abide by our advertising policies related to advertising prices.
Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD pages 42–43)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, franchisees must adhere to Fat Shack's advertising policies concerning prices. Fat Shack may periodically set maximum or minimum prices that franchisees can advertise and charge for their products and services, unless prohibited by applicable law. If Fat Shack establishes a maximum price, franchisees cannot exceed it, and if a minimum price is set, franchisees cannot go below it.
Fat Shack may also establish suggested prices, but if no pricing limits are in place, franchisees can set their own prices, which may be higher or lower than the suggested prices. However, franchisees are still obligated to follow Fat Shack's advertising policies related to these prices. This means that while franchisees might have some flexibility in setting prices, their advertising of those prices must align with the franchisor's guidelines.
This policy ensures brand consistency and prevents price wars among franchisees. It also allows Fat Shack to maintain a certain level of control over how its products and services are perceived in the market. Prospective franchisees should carefully review Fat Shack's advertising policies to understand the extent of these restrictions and how they might impact their ability to attract customers through pricing strategies.