When must the Lease Review Fee be paid to Fat Shack?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
If we are required to review three or more leases or purchase agreements, you must pay us a $750 fee ("Lease Review Fee") plus our out-of-pocket costs of reviewing and (if we so choose) negotiating the lease. The Lease Review Fee must be paid to us at the time we receive the third and each subsequent lease for our review. We may waive all or a portion of the Lease Review Fee for additional sites if we feel that it is appropriate to do so. Notwithstanding your payment of the Lease Review Fee, neither we nor our legal counsel or other professional advisors involved in the lease review are representing you or your interests in relation to the review and approval. You may elect to hire your own attorney or other professional advisors to review your lease or purchase agreement, and we recommend that you do so. You will pay for their services in addition to the Lease Review Fee. You may not sign a lease that we have not approved.
Initial Starting Package
Before your FAT SHACK Restaurant opens for business, you must purchase an initial starting package of materials from us, including smallwares, kitchen signage, take-out menus, promotional items, stereo system receiver and interior décor. You will be required to pay us $9,500 for this initial starting package.
Source: Item 5 — Initial Fees (FDD pages 13–15)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the Lease Review Fee of $750, plus out-of-pocket costs, is due when Fat Shack receives the third and each subsequent lease for review. Fat Shack will review up to two leases or purchase agreements without charge. The document specifies that this fee covers the franchisor's costs for reviewing and potentially negotiating the lease, with any legal counsel acting solely on Fat Shack's behalf.
This means a prospective Fat Shack franchisee will incur a $750 fee for each lease beyond the initial two that Fat Shack reviews. This fee is in addition to any costs the franchisee incurs for their own legal counsel, which Fat Shack recommends. The FDD also states that franchisees may not sign a lease that Fat Shack has not approved.
It is important to note that Fat Shack may choose to waive all or part of the Lease Review Fee for additional sites if they deem it appropriate. However, franchisees should budget for this potential expense when evaluating different locations. The FDD also clarifies that the Lease Review Fee, like the Development Fee, is fully earned by Fat Shack upon payment and is non-refundable under any circumstances.