Is a Fat Shack franchisee required to honor coupons and gift cards at their own cost?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- Except as prohibited or limited by law, Franchisee shall fully participate in all promotional campaigns, prize contests, special offers, gift card programs, discount programs including deal-of-the-day and crowdsourcing programs, and other programs, whether international, national, regional, or local in nature (including the introduction of new products or services or other marketing programs directed or approved by FSI), which are prescribed from time to time by FSI.
Franchisee shall be responsible for the costs of such participation.
In order to participate in FSI's gift card program, Franchisee will be required to utilize the gift card sales and reporting services of a supplier designated by FSI and pay all fees and costs related to those services, which are subject to change by FSI or the supplier periodically.
In addition, Franchisee shall honor any coupons, gift certificates, gift cards, discounts, or other authorized promotional offers of FSI at Franchisee's sole cost unless otherwise specified in writing by FSI.
Franchisee acknowledges that FSI frequently implements such promotions intended to increase customer awareness and build business on an international, national, regional, or local level, and Franchisee's participation in these promotions is essential to their success.
Franchisee acknowledges that FSI has no obligation to reimburse Franchisee for the costs associated with participating in these promotions.
In FSI's discretion, it may create and make available to the public a mobile device application for the FAT SHACK system, which may incorporate these type of promotional programs and offers, which Franchisee must participate in and honor at its sole cost.
FSI may impose additional conditions and requirements related to the application when operational.
From time to time a promotion may not benefit all franchisees in the FAT SHACK system; and if the promotion is not offered in the region, or another unknown hardship arises, FSI may, at FSI's option, exempt Franchisee and/or other franchisees on a case-by-case basis.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, franchisees are generally responsible for covering the costs associated with honoring coupons, gift certificates, gift cards, discounts, and other authorized promotional offers. This means that when a customer uses a coupon or gift card at a Fat Shack location, the franchisee bears the financial burden of the discount or redeemed value, unless Fat Shack specifies otherwise in writing.
This requirement is part of Fat Shack's broader strategy to implement promotional campaigns aimed at increasing customer awareness and building business on various levels (international, national, regional, or local). The FDD emphasizes that franchisee participation in these promotions is considered essential to their success. While Fat Shack acknowledges that these promotions may not always benefit all franchisees equally, they may, at their option, exempt franchisees on a case-by-case basis if a promotion is not offered in their region or if another hardship arises.
The FDD also states that Fat Shack may introduce a mobile device application that incorporates these promotional programs and offers, which franchisees would also be required to participate in and honor at their own cost. Franchisees should recognize that Fat Shack has no obligation to reimburse them for the costs associated with participating in these promotions, and they should factor these expenses into their financial planning. Prospective franchisees should inquire about the frequency, types, and estimated costs of these promotions to better understand their potential financial impact.