What happens to the Fat Shack Development Agreement in the event of the franchisee's death?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
reasonable time, not to exceed 120 days from the date of death or permanent disability (unless extended by probate proceedings), and shall be subject to all terms and conditions applicable to transfers contained in this Article 17. For purposes of a transfer made pursuant to this Section 17.6, there shall be no transfer fee charged by FSI; provided that FSI reserves the right to charge tuition for any training necessitated by the transfer. Failure to transfer the interest within said period of time shall constitute a breach of this Agreement. The term "permanent disability" shall mean a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee (or an owner controlling a Franchisee entity) from supervising the management and operation of the FAT SHACK Restaurant for a period of 120 days from the onset of such disability, impairment or condition. In any event, the FAT SHACK Restaurant shall at all times be managed by a General Manager who has complied with all of FSI's training requirements, regardless of any death or permanent disability covered by this Section 17.6.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, in the event of the franchisee's death or permanent disability, their interest in the franchise must be transferred within a reasonable time, not exceeding 120 days from the date of death or permanent disability, unless probate proceedings extend this period. This transfer is subject to all the standard terms and conditions applicable to transfers outlined in Article 17 of the Franchise Agreement.
For transfers made under these circumstances, Fat Shack will waive the standard transfer fee. However, Fat Shack retains the right to charge tuition for any training that the new transferee requires. Failure to transfer the interest within the specified timeframe constitutes a breach of the agreement.
Regardless of the franchisee's death or permanent disability, the Fat Shack restaurant must always be managed by a General Manager who has met all of Fat Shack's training requirements. The term "permanent disability" is defined as a mental or physical condition that prevents the franchisee (or an owner controlling the franchisee entity) from supervising the restaurant's management and operation for at least 120 days from the onset of the condition.