If Fat Shack develops proprietary software, can they require franchisees to purchase it?

According to the 2025 Fat Shack Franchise Disclosure Document, Fat Shack reserves the right to require franchisees to purchase its proprietary software if it is developed specifically for Fat Shack restaurants and made available. This means that if Fat Shack creates its own software tailored for the brand, franchisees may be obligated to buy it.

This requirement could have significant financial implications for franchisees. The FDD does not specify the potential cost of this proprietary software, so franchisees should inquire about potential costs. Franchisees should also consider that Fat Shack may change the required POS system, back office computer hardware and software, and surveillance security system, requiring franchisees to convert their systems at their own cost.

It is important to note that Fat Shack also requires franchisees to purchase computer equipment and software for their back office and an electronic POS system meeting their specifications. The POS system hardware currently approved is the Toast point of sale system, customized for Fat Shack restaurants. The cost of purchasing the computer system and software is estimated to range from $7,000 to $12,000, with ongoing support and maintenance costs estimated at $350 to $500 monthly. Franchisees are also required to purchase all modifications and upgrades to the POS system software from the supplier or a designated supplier.