When is the initial franchise fee due for a Fat Shack franchise agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay an initial franchise fee of $35,000 for the first Franchise Agreement that you sign, and $18,000 for each subsequent Franchise Agreement that you sign ("Initial Franchise Fee"). You must sign a separate Franchise Agreement for each FAT SHACK Restaurant you operate and pay the Initial Franchise Fee in a lump sum when you sign each Franchise Agreement.
Development Agreement Fees
Under the Development Agreement, you must pay us the Initial Franchise Fee noted above for your first FAT SHACK Restaurant franchise plus a $5,000 fee ("Development Fee") multiplied by the number of additional FAT SHACK Restaurants to be developed. We will credit the Development Fee attributable to the each subsequent FAT SHACK Restaurant to be developed under the Development Agreement to the Initial Franchise Fee due under the Franchise Agreement for such FAT SHACK Restaurant. The total Initial Franchise Fee payable for each of the second and subsequent FAT SHACK Restaurants is $18,000 per franchise. The balance of the Initial Franchise Fee for each FAT SHACK Restaurant you open is due upon your execution of the Franchise Agreement for that FAT SHACK Restaurant. Under the Development Agreement, you must agree to open at least two additional FAT SHACK Restaurants in addition to your first FAT SHACK Restaurant.
Lease Review Program
After you select a location for your FAT SHACK Restaurant, we must approve that location. If the site is approved, we will review your lease, or, if applicable, purchase agreement, for your Restaurant Location. This review is solely for our benefit, and any legal counsel or other professional advisors we engage to assist with the review will be acting only on our behalf. Our approval of a lease indicates only that the lease meets our minimum criteria for the operation of a FAT SHACK Restaurant and that our interests and those of our affiliates are protected.
Source: Item 5 — Initial Fees (FDD pages 13–15)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the initial franchise fee is due in a lump sum when you sign the Franchise Agreement. The initial franchise fee is $35,000 for the first Fat Shack franchise agreement. For each subsequent agreement, the initial franchise fee is $18,000.
If a franchisee enters into a Development Agreement to open multiple Fat Shack restaurants, they must pay the initial franchise fee for the first restaurant, plus a $5,000 development fee multiplied by the number of additional restaurants to be developed. The development fee attributable to each subsequent Fat Shack restaurant will be credited to the initial franchise fee due under the Franchise Agreement for that restaurant. The balance of the initial franchise fee for each Fat Shack Restaurant is due upon your execution of the Franchise Agreement for that Fat Shack Restaurant.
Fat Shack does not offer financing for any portion of the initial fees. All initial fees and payments must be paid in full when you sign the applicable agreement. The initial franchise fee covers Fat Shack's pre-opening and grand opening support, and is fully earned by Fat Shack upon completion of these obligations. No fees are refundable under any circumstances.