What happens if the Assignor does not renew the Lease for the Fat Shack location?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
If the term of the lease for the Restaurant Location ends before the term of this Agreement expires, Franchisee shall negotiate a renewal of the lease term in good faith.
If Franchisee is unable to renew the lease at the Restaurant Location, Franchisee may find a different site within the original Protected Territory, submit it to FSI for approval with, if applicable, the Relocation Fee, and, following FSI's approval, move Franchisee's FAT SHACK Restaurant to the new location, at Franchisee's sole cost.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack FDD, if the term of the lease for the restaurant location ends before the franchise agreement expires, the franchisee is expected to negotiate a renewal of the lease term in good faith. If the franchisee is unable to renew the lease at the current restaurant location, they have the option to find a different site within their original protected territory.
The franchisee must then submit the new site to Fat Shack for approval and pay a relocation fee, if applicable. Following Fat Shack's approval, the franchisee can move their Fat Shack restaurant to the new location. This relocation is to be done at the franchisee's sole cost and expense.
This clause places the responsibility and financial burden of securing and maintaining a suitable location squarely on the franchisee. While Fat Shack retains approval rights over the new location, the franchisee bears the costs associated with relocation if the original lease cannot be renewed. This is a fairly standard practice in franchising, as the physical location is critical to the success of a restaurant franchise.