If a Fat Shack franchisee requests a modification to the Franchise Agreement after signing, what must they generally provide to FSI?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
24.1. Modification
- a. This Agreement may only be modified upon execution of a written agreement between FSI and Franchisee or, at FSI's option, upon notice of the approval of a Super-Majority as defined in Section 24.1.b below. Unless prohibited by law or waived by FSI, Franchisee must provide a general release of any and all claims against FSI if Franchisee requests and FSI consents to modify any provisions of this Agreement after it has been signed.
- b. This Agreement may be modified by FSI at its option whenever FSI and a Super-Majority, as hereinafter defined, of franchisees of FSI agree to the modification. A "Super-Majority" of FSI franchisees shall consist of the owners of at least 75 percent of all FAT SHACK Restaurants, or, if only a portion of FAT SHACK Restaurants are affected by the modification, at least 75 percent of those FAT SHACK Restaurants affected by the modification. Whenever a modification is approved by a Super-Majority, FSI may elect to treat the modification as effective to all franchisees or the applicable group thereof, including Franchisee, to the same extent and in the same manner as if the modification was unanimously approved by all applicable Franchisees, and regardless of whether Franchisee may or may not desire to be
bound by the modification. FSI shall provide Franchisee with notice of any modification to this Agreement based on a Super-Majority approval at least 60 days prior to the date such modification is to be effective. By signing this Agreement, Franchisee appoints the officers of FSI as its attorneys in fact with irrevocable power and authority to execute any such modification so approved.
- c.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee requests a modification to the Franchise Agreement after it has been signed, they must generally provide a general release of any and all claims against FSI. This requirement can be waived by FSI or prohibited by law.
This means that if a Fat Shack franchisee wants to change any part of their agreement after signing it, they will likely need to sign a document releasing Fat Shack from any potential lawsuits or claims they might have. This is a significant requirement, as it limits the franchisee's legal recourse against Fat Shack regarding the original agreement.
However, the Franchise Agreement can also be modified if FSI and a Super-Majority of franchisees agree to the modification. A "Super-Majority" of FSI franchisees consists of the owners of at least 75 percent of all Fat Shack Restaurants, or, if only a portion of Fat Shack Restaurants are affected by the modification, at least 75 percent of those Fat Shack Restaurants affected by the modification. FSI shall provide Franchisee with notice of any modification to this Agreement based on a Super-Majority approval at least 60 days prior to the date such modification is to be effective. By signing the Franchise Agreement, the franchisee appoints the officers of FSI as its attorneys in fact with irrevocable power and authority to execute any such modification so approved.
This is a fairly standard clause in franchise agreements, intended to protect the franchisor from future legal challenges related to the agreement. Prospective franchisees should carefully consider this requirement and seek legal counsel to understand the full implications of releasing all claims against Fat Shack before requesting a modification.