Is a guarantor for a Fat Shack development agreement bound by the confidentiality provisions outlined in the Development Agreement?

According to Fat Shack's 2025 Franchise Disclosure Document, a guarantor for a Fat Shack development agreement is indeed bound by the confidentiality provisions outlined in the Development Agreement. Specifically, the Guaranty and Assumption of Franchisee's Obligations agreement states that the guarantor "shall be bound by the restrictive covenants, confidentiality provisions, and the indemnification provisions contained in the Development Agreement."

This means that anyone who guarantees the financial or performance obligations of a Fat Shack franchisee under a Development Agreement also agrees to keep confidential any sensitive information they learn about Fat Shack's business. This could include trade secrets, operational methods, financial data, or other proprietary information. The guarantor's confidentiality obligations are in effect for the term of the Development Agreement, including any renewals.

For a prospective Fat Shack franchisee, this is an important consideration when seeking a guarantor. The guarantor needs to understand that they are not only taking on a financial risk but also a legal obligation to protect Fat Shack's confidential information. Failure to comply with these confidentiality provisions could result in legal action against the guarantor.