How can FSI pay the purchase price for the Fat Shack Restaurant?

According to Fat Shack's 2025 Franchise Disclosure Document, FSI (Fat Shack International) has two options for paying the purchase price of a Fat Shack Restaurant. FSI can pay the full purchase price in cash at the closing. Alternatively, FSI can choose to pay the purchase price in 24 equal consecutive monthly installments. If FSI chooses the installment option, interest will be applied at a rate equal to the prime lending rate as of the closing date at FSI's primary bank.

This provides FSI with flexibility in managing its finances when purchasing a franchise location. The option to pay in installments could be beneficial for FSI if it wants to preserve capital or has other investment opportunities. However, it's important to note that the interest rate applied to the installment payments will increase the overall cost of the purchase.

For a prospective Fat Shack franchisee, this clause ensures that the terms of the purchase are clearly defined. The franchisee knows that they will receive the fair market value for their assets, and they understand how FSI will make the payments. This can provide some financial security and predictability during the transition period when the franchise is being sold back to FSI.

It is important to note that the purchase price will be adjusted by setting off any amount then owing by the franchisee to FSI, including any amounts paid by FSI to cure the franchisee's defaults with third parties such as landlords. Additionally, all assets must be transferred free and clear of all liens and encumbrances, with all sales and transfer taxes paid by the franchisee.