Is a Fat Shack franchisee allowed to grant a subfranchise under the Development Agreement?

According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee is not permitted to subfranchise or license the use of Fat Shack's marks or licensed methods to others under the Development Agreement. The only exception is the right to enter into Subsequent Franchise Agreements. This means that while a franchisee can develop multiple Fat Shack restaurants within their protected area, each location must be directly owned and operated by the franchisee under a separate franchise agreement with Fat Shack.

This restriction is typical in franchising, as franchisors like Fat Shack want to maintain control over brand standards and the customer experience. Allowing subfranchising could dilute the brand if subfranchisees do not adhere to the franchisor's standards. By prohibiting subfranchising, Fat Shack ensures that all locations are directly accountable to the company.

For a prospective Fat Shack franchisee, this means they must be prepared to directly manage and oversee the operations of each Fat Shack restaurant they develop. They cannot delegate the operational responsibilities to a third party through a subfranchise arrangement. This requires a significant commitment of time, resources, and management expertise from the franchisee.