Can FSI (Fat Shack International) amend any term of the obligations guaranteed by the Fat Shack development agreement without the consent of the guarantor?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Each of the undersigned waives the following:
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- Acceptance and notice of acceptance by FSI of the foregoing undertaking;
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- Notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
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- Protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
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- Any right he or she may have to require that any action be brought against Franchisee or any other person as a condition of liability; and
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- Notice of any amendment, modification, deletion or addition of any term or condition of or to any of the obligations hereby guaranteed.
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- Notice of any termination as to future liability of any other guarantor.
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- Any and all other notices and legal or equitable defenses to which he or she may be entitled.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a guarantor's consent is not required for amendments to the obligations guaranteed under the Development Agreement. The guarantor explicitly waives the right to notice of any changes to the terms or conditions of these guaranteed obligations. This waiver is part of the Guaranty and Assumption of Franchisee's Obligations agreement.
This means that Fat Shack International (FSI) can modify the Development Agreement without informing or obtaining approval from the guarantor. The guarantor remains liable for the franchisee's obligations even if those obligations change. This could include changes to payment schedules, performance metrics, or other key terms of the agreement.
For a prospective Fat Shack franchisee, this highlights the importance of carefully considering who acts as a guarantor. The guarantor should be fully aware of the potential for changes to the Development Agreement and understand that their liability will continue regardless of these changes. It also underscores the need for the franchisee to maintain open communication with the guarantor about any modifications to the agreement to avoid potential disputes or misunderstandings.
This type of clause is not uncommon in franchising, as franchisors often seek to maintain flexibility in their agreements. However, it places a significant responsibility on the guarantor to understand the full scope of their commitment and the potential risks involved.