Does FSI represent the Fat Shack franchisee's interests when reviewing and certifying the lease or purchase agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
FSI's approval of a lease and architectural drawings indicates only that the lease and drawings meet FSI's minimum criteria for the operation of a FAT SHACK Restaurant and that the interests of FSI and its affiliates are protected.
FSI and any legal counsel, architectural advisors, or other professional advisors reviewing the lease or purchase agreement and providing or reviewing the architectural drawings will be acting only behalf of FSI.
Franchisee acknowledges that FSI's review of the lease or purchase agreement and delivery of architectural drawings does not constitute: (i) a guaranty of the Restaurant Location's suitability for a FAT SHACK Restaurant; (ii) a guaranty that the FAT SHACK business established at the Restaurant Location will be successful; (iii) any assurance that the business terms of the lease or purchase agreement, including the rent or purchase price, are the most favorable terms available in the market surrounding the Restaurant Location; (iv) any representation that the lease or purchase agreement is entirely consistent with the terms of any signed letter of intent; (v) a representation that FSI would sign the lease or purchase agreement for its own account; or (vi) any other guaranty or assurance of any kind.
It is Franchisee's sole responsibility to ensure that the Restaurant Location complies with all applicable local ordinances, building codes and zoning regulations.
Notwithstanding Franchisee's obligation to pay the Lease Review Fee, defined in Section 6.3 below, Franchisee acknowledges that neither FSI nor its legal counsel, architectural advisors, or other professional advisors are representing Franchisee or Franchisee's interests in relation to their review and certification of the lease or purchase agreement or in relation to the architectural drawings.
Franchisee is not a third party beneficiary of such review and certification.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, FSI does not represent the franchisee's interests when reviewing and certifying the lease or purchase agreement. The FDD clearly states that FSI and its advisors are acting only on behalf of FSI, and the franchisee is not considered a third-party beneficiary of this review and certification.
Fat Shack's approval of a lease and architectural drawings only indicates that these meet FSI's minimum criteria for a Fat Shack Restaurant and protect the interests of FSI and its affiliates. This approval does not guarantee the location's suitability or the business's success, nor does it assure that the lease terms are the most favorable available.
Therefore, it is the franchisee's sole responsibility to ensure the location complies with all local ordinances, building codes, and zoning regulations. Despite the franchisee paying a Lease Review Fee, neither FSI nor its advisors represent the franchisee's interests in the lease or purchase agreement review. This arrangement is typical in franchising, where the franchisor prioritizes protecting its brand standards and interests, while the franchisee bears the responsibility for their own business decisions and legal compliance.