What is a Fat Shack franchisee required to do when locating a restaurant location?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchisee is granted the right to own and operate one FAT SHACK Restaurant at the address and location ("Restaurant Location") set forth in the Addendum to Franchise Agreement attached hereto as Exhibit I (the "Addendum"). If a specific address has not been chosen as of the date this Agreement is signed, then Franchisee shall choose and acquire a location for its FAT SHACK Restaurant within the nonexclusive Target Area set forth in the Addendum. Franchisee shall select and propose to FSI for approval a specific site for the Restaurant Location within the Target Area, which FSI shall have the right to approve or disapprove in accordance with the terms set forth in this Agreement. If the Addendum lists only a Target Area and not the Restaurant Location, then the Restaurant Location Supplement to Franchise Agreement attached hereto as Exhibit II will be executed by FSI and Franchisee upon FSI's later approval of the Restaurant Location. Franchisee acknowledges and agrees that the Restaurant Location will be a specific numbered street or mall address at which Franchisee's FAT SHACK Restaurant will be physically located. The Restaurant Location cannot and will not under any circumstances be defined as a geographic area or be described in terms other than a specific numbered street or mall address. During and after the term of this Agreement, neither Franchisee nor Franchisee's successors and assigns shall use the Restaurant Location for any purpose other than operating a FAT SHACK Restaurant.
3.2. Protected Territory
Subject to Section 3.4 and Section 3.5 of this Agreement regarding Special Venues and Channels and Captive Audience Venues, Franchisee is granted a geographic area around the Restaurant Location (the "Protected Territory") in which FSI will not operate, nor permit a third party to operate, a FAT SHACK Restaurant as long as Franchisee is in substantial compliance with all the provisions of this Agreement. The Protected Territory is an area encompassing a three mile radius around the Restaurant Location as measured from the front door of the Restaurant. A FAT SHACK Restaurant at a Captive Audience Venue does not have a Protected Territory. Because there are exceptions where FSI, its affiliates or other third parties may operate a FAT SHACK Restaurant in Franchisee's Protected Territory, Franchisee's Protected Territory is not considered an exclusive territory.
3.3. Limitation on Franchise Rights
The rights granted to Franchisee are for the specific Restaurant Location and cannot be transferred to any other location, except with FSI's prior written approval. The Marks and Licensed Methods are licensed only for the Restaurant Location. If Franchisee elects to move or relocate the Restaurant Location at any time during the term of this Agreement, Franchisee shall submit information about the proposed Restaurant Location to FSI for approval in accordance with the terms of Section 6.1 and other provisions of this Agreement and shall simultaneously pay FSI a "Relocation Fee" that is equal to 25 percent of the then-current Initial Franchise Fee for a first FAT SHACK Restaurant.
3.4.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if a specific address hasn't been chosen when signing the agreement, the franchisee must select a location within the nonexclusive Target Area outlined in the Addendum to Franchise Agreement (Exhibit I). The franchisee then proposes this site to Fat Shack for approval. Fat Shack retains the right to either approve or disapprove the proposed location based on the terms of the agreement.
If only a Target Area is listed in the Addendum, a Restaurant Location Supplement to the Franchise Agreement (Exhibit II) will be executed once Fat Shack approves the location. The document emphasizes that the Restaurant Location must be a specific numbered street or mall address; it cannot be a general geographic area or described in any other terms. The franchisee is restricted from using the Restaurant Location for any purpose other than operating a Fat Shack restaurant, both during and after the agreement term.
Furthermore, the franchisee is prohibited from entering into any contract to purchase or lease premises for a Fat Shack restaurant without prior written approval from Fat Shack and without signing a Subsequent Franchise Agreement. Fat Shack will assist in the selection and approval of locations according to the terms of the Subsequent Franchise Agreement, but the document clarifies that Fat Shack is not obligated to select or acquire a location on behalf of the franchisee. The franchisee is also responsible for obtaining all necessary permits and licenses for the lawful construction and operation of the Fat Shack restaurant, including zoning, access, sign, health, liquor (if applicable), fire and safety requirements, building permits, and other required licenses and registrations. The franchisee must also ensure compliance with the Americans with Disabilities Act and all other applicable laws and regulations.