What are the Fat Shack franchisee's obligations upon termination or expiration of the franchise agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
ion or Expiration
Franchisee is obligated upon termination or expiration of this Agreement to immediately do all of the following:
- a. Pay all Royalties, Marketing and Promotion Fees, Noncompliance Service Charges, and other amounts then owed FSI or any of its affiliates pursuant to this Agreement, or otherwise.
- b. Cease to identify itself as a FAT SHACK franchisee or use any Marks, trade secrets, signs, symbols, devices, trade names, or other materials of FSI.
- c. Cease to identify the Restaurant Location as being, or having been, associated with FSI, and immediately cease operating any business at the Restaurant Location.
- d. Cease using any proprietary mark of FSI or any mark in any way associated with the Marks and Licensed Methods and deliver to FSI all signs, sign-faces, advertising materials, forms and other materials bearing any of the Marks or otherwise identified with FSI.
- e. Deliver to FSI the Operations Manual and all other information, documents and copies thereof which are proprietary to FSI.
- f. Promptly take such action as may be required to cancel all fictitious or assumed names or equivalent registrations relating to its use of any Marks which are under the exclusive control of FSI or, at the option of FSI, assign the same to FSI.
- Notify the telephone company and all telephone directory publishers, domain name registration companies, and social media website operators, of the termination or expiration of Franchisee's right to use any telephone number, domain name, social media websites or accounts, and any regular, classified or other telephone directory listings associated with any Mark and complete all forms, and provide other necessary notification to authorize the transfer thereof to FSI or its designee. Franchisee acknowledges that, as between Franchisee and FSI, FSI has the sole rights to and interest in all telephone, telecopy or facsimile machine numbers and directory listings, all domain names, and social media websites or accounts associated with any Mark.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee has several obligations. These include paying all outstanding royalties, marketing and promotion fees, noncompliance service charges, and any other amounts owed to Fat Shack or its affiliates. The franchisee must also immediately cease identifying themselves as a Fat Shack franchisee and discontinue using any of Fat Shack's trademarks, trade secrets, signs, symbols, devices, trade names, or other proprietary materials.
Additionally, the Fat Shack franchisee is required to abide by all restrictive covenants outlined in Article 21 of the agreement. They must also settle all outstanding payments to third parties for products or services directly or indirectly related to the Fat Shack restaurant. The franchisee is obligated to transfer all telephone, telecopy, or facsimile machine numbers, directory listings, domain names, and social media websites or accounts associated with any Fat Shack mark to Fat Shack or its designee.
These obligations ensure a clean break between the franchisee and Fat Shack, protecting the brand's identity and financial interests. Franchisees should be aware of these post-termination requirements to avoid potential legal or financial repercussions. It is also important to note that state and federal laws may govern the franchisee's rights regarding termination or expiration of the agreement, potentially superseding the terms outlined in the franchise agreement itself.