What is a Fat Shack franchisee required to do before selling or transferring their franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
17.2. Pre-Conditions to Franchisee's Transfer
Franchisee agrees that there may be no transfers before the FAT SHACK Restaurant has opened for business. FSI will not approve a proposed transfer in any case where Franchisee (and its owners) is not in full compliance with this Agreement. The proposed transferee and its owners must be individuals of good moral character and otherwise meet FSI's then applicable standards for franchisees. In the event of a transfer, all of the following conditions must be met before or concurrently with the effective date of the transfer:
- a. All amounts due and owing pursuant to this Agreement or otherwise by Franchisee to FSI, its affiliates or to third parties whose debts or obligations FSI has guaranteed on behalf of Franchisee, if any, are paid in full;
- b. Franchisee has submitted all required reports and statements;
- c. Franchisee has not violated any provision of this Agreement, the FAT SHACK Restaurant's lease, or any other agreement with FSI during the 60-day period before Franchisee requested FSI's consent to the transfer or during the period between Franchisee's request and the effective date of the transfer:
- d. The proposed transferee agrees to operate the FAT SHACK Restaurant as a FAT SHACK Restaurant, signs the then-current form of franchise agreement, the provisions of which may differ materially from any and all of those contained in this Agreement, and satisfactorily completes the initial training program;
- e. Franchisee provides written notice to FSI at least 30 days prior to the proposed effective date of the transfer, and includes information reasonably detailed to enable FSI to evaluate the
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee must meet several conditions before they can transfer their franchise. First, the Fat Shack restaurant must have already opened for business. Fat Shack will not approve a transfer if the franchisee is not in full compliance with the franchise agreement. The potential new franchisee must also be of good moral character and meet Fat Shack's standards for franchisees.
Before or during the transfer, all outstanding payments owed by the franchisee to Fat Shack, its affiliates, or third parties that Fat Shack has guaranteed on behalf of the franchisee must be paid in full. The franchisee must have also submitted all required reports and statements. Additionally, the franchisee must not have violated any terms of the franchise agreement, the restaurant's lease, or any other agreement with Fat Shack during the 60-day period before requesting consent for the transfer, or between the request and the transfer date.
The proposed new franchisee must agree to operate the Fat Shack restaurant as a Fat Shack, sign the current franchise agreement (which may have different terms), and complete the initial training program. The franchisee must also provide written notice to Fat Shack at least 30 days before the proposed transfer date. This notice should include detailed information to allow Fat Shack to evaluate the terms and conditions of the proposed transfer, including a written offer from the proposed new franchisee.