What information regarding the Fat Shack Restaurant's operations must a franchisee submit with the notice of exercising successor franchise rights?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided Franchisee is not in default hereunder either at the time of its notice of exercise of successor franchise rights or at the time of the grant of the successor franchise rights, at the end of the initial term hereof Franchisee will have the option to obtain a successor franchise for three additional terms of five years each, by acquiring successor franchise rights in accordance with the terms of this Section 18.3 and Section 18.4 below, unless FSI declines to offer a successor franchise in accordance with Section 18.5 below. Franchisee may exercise its option for a successor franchise by giving written notice of such exercise to FSI not more than one year nor less than 180 days prior to the scheduled expiration of the Agreement. With the notice of exercise of its successor franchise rights, Franchisee shall submit to FSI all information requested by FSI regarding the operations of the FAT SHACK
Restaurant and required by this Agreement. Franchisee's successor franchise rights will become effective upon compliance with those requirements set forth in Section 18.4 below.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee must submit all information requested by Fat Shack regarding the restaurant's operations and required by the Franchise Agreement when providing written notice of exercising their successor franchise rights. This notice must be given not more than one year and not less than 180 days before the agreement's expiration.
To be eligible for successor franchise rights, the franchisee must not be in default at the time of the notice or when the successor franchise is granted. They must have maintained compliance with all agreement provisions during the current term, including timely royalty and other payments. Compliance means that the franchisee should not have received more than three written notifications of breach from Fat Shack during the term.
Additionally, the franchisee may be required to execute the current Franchise Agreement form, which could have substantially different terms, including changes to royalty and other fees. They may also need to upgrade and remodel the Fat Shack restaurant to meet current Operations Manual requirements at their own expense. The franchisee will also need to execute a successor franchise rider that includes a general release of claims against Fat Shack and pay a $6,000 successor franchise fee upon each exercise of successor rights. The franchisee, or their General Manager, might also need to complete a refresher operations training program.