Is the guarantor of a Fat Shack franchise entitled to notice of any amendments to the Development Agreement?
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, the guarantor of a Fat Shack franchise waives the right to receive notice of any amendments, modifications, deletions, or additions to the Development Agreement. This means that the guarantor will be bound by any changes made to the agreement, even if they are not informed of these changes beforehand. This waiver is part of the Guaranty and Assumption of Franchisee's Obligations agreement.
This waiver has significant implications for anyone considering acting as a guarantor for a Fat Shack franchise. Because the guarantor will be held liable for the franchisee's obligations under the Development Agreement, it is crucial to understand that the agreement can be changed without their knowledge or consent, potentially increasing their financial risk. The guarantor is essentially agreeing to be bound by any future version of the Development Agreement, regardless of how it might be altered.
In addition to waiving notice of amendments, the guarantor also waives other rights, including notice of acceptance of the guaranty by Fat Shack, notice of demand for payment or nonperformance, and any right to require Fat Shack to first pursue action against the franchisee. The guarantor also consents to joint and several liability, meaning they can be held fully responsible for the franchisee's obligations, even if there are other guarantors.
Prospective guarantors should carefully consider these waivers and seek legal advice to fully understand the extent of their obligations and potential liabilities before signing the Guaranty and Assumption of Franchisee's Obligations agreement. They should also conduct thorough due diligence on the franchisee and the Fat Shack franchise opportunity to assess the risks involved.