If the Fat Shack franchisee is an entity, can that entity operate other businesses?

According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee is a business entity, it is generally restricted to operating only the Fat Shack Restaurant governed by the Franchise Agreement. However, the entity may operate other businesses if it obtains prior written approval from Fat Shack Inc. (FSI).

This requirement ensures that the franchisee's primary focus remains on the Fat Shack business and that there is no conflict of interest or diversion of resources to other ventures. It also allows Fat Shack to maintain control over its brand and operational standards, as the entity's activities are limited to the scope of the franchise agreement unless explicitly approved.

For a prospective franchisee, this means that if you plan to operate the Fat Shack franchise through a corporation, LLC, or other business entity, you must be prepared for that entity to dedicate its resources primarily to the Fat Shack business. If you wish to engage in other business activities through the same entity, you must seek and obtain written permission from Fat Shack, which may or may not be granted at their discretion. This is a fairly standard clause in franchise agreements, designed to protect the brand and ensure franchisee focus.