When must the Guaranty and Assumption of Franchisee's Obligations be executed for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a corporation, partnership, limited liability company or other business entity, the following additional conditions must be met, along with any other conditions as may be established by FSI for entity franchisees:
- a. Contemporaneously with the business entity acquiring the franchise rights, thereafter upon the issuance or transfer of any ownership interests in the business entity or the appointment or election of any person as director, officer, member or manager of the business entity, and at any other time requested by FSI, the shareholders, members, partners, other owners, directors, officers, managers (as applicable), and any other individuals as designated by FSI will execute the Guaranty and Assumption of Franchisee's Obligations attached hereto as Exhibit V and incorporated herein by reference, personally guaranteeing full payment and performance of Franchisee's obligations to FSI and individually undertaking to be bound, jointly and severally, by all the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if the franchisee is a business entity such as a corporation, partnership, or limited liability company, the Guaranty and Assumption of Franchisee's Obligations must be executed at specific times. These times include when the business entity initially acquires the franchise rights.
Additionally, the document states that the Guaranty and Assumption of Franchisee's Obligations must be executed upon the issuance or transfer of any ownership interests in the business entity. This also applies to the appointment or election of any person as a director, officer, member, or manager of the business entity. Fat Shack may also request this document be executed at any other time they deem necessary.
This agreement ensures that specific individuals, such as shareholders, members, partners, owners, directors, officers, and managers, personally guarantee the franchisee's obligations to Fat Shack. These individuals also agree to be individually bound by all the terms of the Franchise Agreement. This requirement provides Fat Shack with an added layer of security, ensuring that there are individuals who are personally liable for the franchisee's performance and adherence to the franchise agreement.