What happens if the Assignor does not renew the lease for the Fat Shack restaurant?
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 Fat Shack's 2025 Franchise Disclosure Document, if the lease term for the restaurant location ends before the franchise agreement expires, the franchisee is responsible for negotiating a renewal of the lease in good faith. If the franchisee is unable to renew the lease at the current 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. Once Fat Shack approves the new location, the franchisee can move their Fat Shack restaurant to the new site. This relocation is done at the franchisee's sole cost and expense.
This clause places the onus on the franchisee to maintain a location for the duration of the franchise agreement, even if the original lease cannot be renewed. It also gives Fat Shack the ability to approve any new location to ensure it meets their standards and protects their brand. The franchisee bears the financial responsibility for securing and moving to a new location, which could involve significant costs.