Does FSI have an obligation to select or acquire a location on behalf of a Fat Shack franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
further provided in Article 4 below.
- 3.3. Franchisee shall not, without the prior written approval of FSI and without signing a Subsequent Franchise Agreement related to the FAT SHACK Restaurant for a particular location, enter into any contract for the purchase or lease of any premises for use as a FAT SHACK Restaurant. FSI will assist Franchisee in the selection and approval of locations for its FAT SHACK Restaurants in accordance with the terms and conditions of the applicable Subsequent Franchise Agreement. Franchisee acknowledges that FSI has no obligation to select or acquire a location on behalf of Franchisee.
- 3.4. Each Subsequent Franchise Agreement to be executed by Franchisee for each FAT SHACK Restaurant to be developed hereunder shall be in the form of Franchise Agreement then generally being offered to franchisees by FSI, which may contain terms subsequently different then the terms of the Initial Franchise Agreement. Notwithstanding the foregoing, FSI agrees that it will not charge an Initial Franchise Fee to Franchisee which is greater than the amounts set forth in Section 2.1. above. Franchisee acknowledges that FSI has the right, however, to charge then current published rates for the required products, royalty percentages, advertising contributions and other fees, products and services offered to Franchisee.
- 3.5. Franchisee acknowledges that FSI shall have the right, in FSI's sole discretion, to waive the initial training program, which is the same as or similar to the training provided under Section 7.1 of the Initial Franchise Agreement, for the second and each subsequent FAT SHACK Restaurant developed under the terms of this Development Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack (FSI) provides assistance to franchisees in the selection and approval of locations for their restaurants. However, FSI has no obligation to select or acquire a location on behalf of the franchisee. The franchisee is responsible for choosing and acquiring a location within a target area, subject to FSI's approval. FSI's approval of a site is based on information submitted by the franchisee and does not guarantee the success or profitability of the location. Site selection, acquisition, and development are the sole responsibility of the franchisee, unless otherwise agreed in writing.
Fat Shack offers general criteria for a satisfactory site and determines whether a proposed site meets these criteria before formal acceptance. The franchisee must submit a completed site submittal package with all required information for FSI to assess the proposed location. FSI's assistance includes providing general criteria for a suitable site and determining if the proposed site fulfills the necessary criteria before formal acceptance.
While Fat Shack assists with site selection, the ultimate responsibility for finding and securing a location rests with the franchisee. This means the franchisee bears the risk and cost associated with this process. Prospective franchisees should carefully consider the site selection criteria provided by Fat Shack and conduct thorough due diligence to ensure the chosen location meets their business needs and complies with all local regulations.