If Fat Shack places advertising directly, is it entitled to a fee for such services?

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack can place advertising directly instead of using an advertising agency. If Fat Shack does so, it is entitled to a fee for these services. However, this fee cannot exceed the highest rate charged for similar services by a recognized advertising agency not owned by Fat Shack or its officers, directors, or employees. This is in addition to reimbursement for costs incurred by Fat Shack.

This means that Fat Shack franchisees may be indirectly paying Fat Shack for advertising services if the franchisor decides to handle advertising directly. The fee charged by Fat Shack must be competitive with outside agencies, protecting franchisees from overpayment.

It's important for prospective franchisees to understand how the Marketing and Promotion Fund is managed and what safeguards are in place to ensure fair practices. Franchisees should inquire about the typical range of fees charged when Fat Shack handles advertising directly and how these fees compare to industry standards. This will help franchisees assess the value and cost-effectiveness of Fat Shack's advertising services.