Is a Fat Shack franchisee responsible for the cost of relocating their restaurant?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
nt Location. If the term of the lease for the Restaurant Location ends before the term of this Agreement expires, Franchisee shall negotiate a renewal of the lease term in good faith. If Franchisee is unable to renew the lease at the Restaurant Location, Franchisee may find a different site within the original Protected Territory, submit it to FSI for approval with, if applicable, the Relocation Fee, and, following FSI's approval, move Franchisee's FAT SHACK Restaurant to the new location, at Franchisee's sole cost.
- i. Franchisee agrees to renovate, refurbish, remodel or replace, at its own expense, the real and personal property and equipment used in the operation of the FAT SHACK Restaurant, when required by FSI in order to comply with the image, standards of operation and performance capability established by FSI from time to time. If FSI changes its image or standards of operation, it shall give Franchisee a reasonable period of time within which to comply with such changes.
- j. Franchisee shall not operate any other business or profession from or through the FAT SHACK Restaurant. If Franchisee is an entity, the entity shall only operate the FAT SHACK Restaurant governed by this Agreement and no other business, unless Franchisee receives FSI's prior written approval.
- k.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee is responsible for the costs associated with relocating their restaurant. If a Fat Shack franchisee is unable to renew their lease at the current restaurant location, they have the option to find a new site within their original protected territory. However, the franchisee is responsible for all costs associated with moving the Fat Shack restaurant to the new location.
In addition to covering the relocation expenses, the Fat Shack franchisee must also pay a Relocation Fee to Fat Shack. This fee is equal to 25% of the then-current Initial Franchise Fee for a first Fat Shack Restaurant. This fee must be paid when the franchisee submits information about the proposed new restaurant location to Fat Shack for approval.
This means that relocating a Fat Shack restaurant can be a significant financial undertaking for the franchisee. They must be prepared to cover not only the direct costs of moving but also the Relocation Fee payable to Fat Shack. Franchisees should carefully consider these costs and ensure they have sufficient capital before deciding to relocate their Fat Shack restaurant.