What is the late fee charged to a Fat Shack franchisee for failing to pay on time?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. Failure to Make Payments.
If Franchisee fails to pay any amounts due FSI or FSI's affiliates within 10 days after receiving notice that such fees or amounts are overdue.
- j. Failure to Authorize Transfer of Funds.
If Franchisee revokes or cancels the Authorization Agreement executed by Franchisee and provided to FSI pursuant to Section 5.4, or takes other steps to prevent FSI from obtaining payment of any amounts due under this Agreement, or otherwise, by electronic funds transfer of funds from Franchisee's bank account to FSI's bank account, and fails to provide a valid replacement Authorization Agreement within five days after receiving notice of such matter.
- k. Financial Reporting.
If Franchisee fails to file reports of its Gross Sales within 10 days after receiving notice that such reports are overdue.
- l. Failure to Complete Training or Open.
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 fails to pay any amounts due to FSI or its affiliates, they have 10 days after receiving notice that such fees or amounts are overdue to make the payment. While this section outlines the timeframe for addressing overdue payments, it does not specify the exact late fee or interest charge that Fat Shack may impose.
However, the document does mention that the Marketing and Promotion Fee is subject to the same administrative fee, late charge, and interest as the Royalty Fee. To fully understand the financial implications of late payments, prospective Fat Shack franchisees should inquire about the specific late fees, interest rates, and administrative charges associated with both Royalty Fees and Marketing and Promotion Fees.
Understanding these potential costs is crucial for managing cash flow and ensuring the financial stability of the franchise. A clear understanding of these terms will help franchisees avoid unexpected expenses and maintain a positive relationship with the franchisor.