What is the Fat Shack franchisee's obligation if a Condemnation or Casualty occurs at the Restaurant Location?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must immediately notify FSI of the occurrence of any (i) taking of any portion of the Restaurant Location by eminent domain, or (ii) any fire or other casualty damage to the Restaurant Location or Franchisee's FAT SHACK Restaurant (either, a "Condemnation or Casualty"). If, in FSI's business judgment, the Condemnation or Casualty is significant enough to render the continued operation of Franchisee's FAT SHACK Restaurant from the Restaurant Location in accordance with FSI's standards and specifications impractical, then Franchisee shall have 90 days from the date of the Condemnation or Casualty to (i) select a new location to serve as the Restaurant Location, (ii) obtain FSI's approval of the location and the lease or purchase agreement in accordance with Article 6, which shall require that Franchisee pay FSI Lease Review Fee if the number of leases and purchase agreements presented for FSI's review exceeds two, and (iii) recommence operations of Franchisee's FAT SHACK Restaurant at the new Restaurant Location. If Franchisee fails to recommence operations at an approved Restaurant Location during this 90-day period, FSI may terminate this Agreement upon written notice to Franchisee. If the Condemnation or Casualty, in FSI's business judgment, is not significant enough to render the continued operation of Franchisee's FAT SHACK Restaurant from the Restaurant Location in accordance with FSI's standards and specifications impractical, then Franchisee will use its best efforts to make all necessary repairs as soon as possible to make the Restaurant Location and Franchisee's FAT SHACK Restaurant conform to their condition, character and appearance immediately before such Condemnation or Casualty, according to the standards and specifications of FSI.
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 immediately inform Fat Shack, Inc. (FSI) if any portion of the restaurant location is taken by eminent domain, or if there is any fire or other casualty damage to the restaurant location or the franchisee's Fat Shack restaurant. These events are defined as a "Condemnation or Casualty."
If FSI determines that the Condemnation or Casualty is significant enough to make continued operation impractical, the franchisee has 90 days to select a new location, obtain FSI's approval of the location and lease or purchase agreement, and recommence operations at the new location. If the franchisee presents more than two leases or purchase agreements for FSI's review, they must pay FSI a Lease Review Fee. Failure to recommence operations within this 90-day period may result in FSI terminating the Franchise Agreement with written notice.
However, if FSI determines that the Condemnation or Casualty is not significant enough to render continued operation impractical, the franchisee must use their best efforts to make all necessary repairs as soon as possible to restore the restaurant location and the Fat Shack restaurant to its condition, character, and appearance immediately before the event, according to FSI's standards and specifications.