Other than the initial starting package, is Fat Shack or any affiliated person currently an approved supplier for Fat Shack franchisees?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Other than the initial starting package, neither we nor any person affiliated with us are currently an approved supplier for our franchisees. However, we, either directly or through an affiliate, reserve the right to sell other products, equipment, supplies and services to franchisees and to derive revenue from such sales. During our last fiscal year (ending on December 31, 2024), we had no revenues from products and services provided to franchisees.
We estimate that the costs of your purchases from designated or approved sources, or according to our standards and specifications, may range from 46 to 75 percent of the total cost of establishing a FAT SHACK Restaurant and approximately 25 to 50 percent of the total cost of operating a FAT SHACK Restaurant after that time.
If you want to purchase or lease any inventory items, products, equipment, supplies, or services we have not approved or through a supplier who we have not previously approved, you must notify us in writing and obtain our approval in advance. The notification should include sufficient specifications, photographs, drawings and other information and samples to determine whether those items or those suppliers meet our specifications. You must reimburse us for the actual cost of any testing and the reasonable cost of investigation to determine whether those items or suppliers meet our specifications. We will advise you within 30 days after we receive all required information and complete any inspection or investigation whether the items or suppliers meet our specifications. We may, in our sole discretion, for any reason whatsoever, elect to withhold approval of the items or suppliers. We reserve the right to change the published standards regarding any approved supplier or any products, equipment, supplies, or services used, offered for sale or leased by franchisees on 30 days written notice to all franchisees and all approved suppliers. We may revoke our approval of any products, equipment, supplies, services, or suppliers previously approved by written notice to the supplier and each franchisee using that supplier.
We do not provide material benefits, such as renewal or granting additional franchises to you, based on your use of designated or approved sources or suppliers.
Advertising and Marketing
All marketing and promotion of your FAT SHACK Restaurant must conform to our standards and specifications. You must submit to us or our approved vendor samples of all advertising and promotional materials that have not been prepared or previously approved by us or them. You must pay for the cost of any necessary modifications we may require to conform to our standards and specifications for any proposed materials.
Except as prohibited or limited by law or unless we exempt you from a particular promotion, you must, at your sole cost, fully participate in all promotional campaigns, prize contests, special offers, discount programs, including deal-of-the-day and crowdsourcing programs, and other programs, whether national, regional, or local in nature, which we prescribe.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, neither Fat Shack nor any affiliated person is currently an approved supplier for franchisees, with the exception of the initial starting package. However, Fat Shack retains the right to sell products, equipment, supplies, and services to franchisees directly or through an affiliate in the future and to generate revenue from these sales. As of the end of the last fiscal year on December 31, 2024, Fat Shack had not yet generated any revenues from products and services provided to franchisees.
The FDD specifies that franchisees must purchase an initial starting package of materials directly from Fat Shack to launch their restaurant, which includes items like smallwares, kitchen signage, take-out menus, promotional items, a stereo system receiver, and interior décor. While Fat Shack is currently the sole approved supplier for this initial package, they reserve the right to designate an approved supplier for this package in the future.
Franchisees are required to purchase food and drink products, paper products, gift cards and loyalty cards, marketing materials, printed materials, and equipment from suppliers that Fat Shack designates or approves. The costs of purchases from these designated or approved sources, or according to Fat Shack's standards and specifications, are estimated to range from 46% to 75% of the total cost of establishing a Fat Shack Restaurant and approximately 25% to 50% of the total cost of operating the restaurant after that time.
If a franchisee wishes to use a supplier or purchase items not already approved, they must seek written approval from Fat Shack, providing sufficient information for evaluation. The franchisee will bear the costs of testing and investigation to determine if the items or suppliers meet Fat Shack's specifications. Fat Shack reserves the right to withhold approval at its discretion. They can also change the standards for approved suppliers or revoke approval with written notice.