What is the limitation on Fat Shack's collection of transfer fees?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
reasonable time, not to exceed 120 days from the date of death or permanent disability (unless extended by probate proceedings), and shall be subject to all terms and conditions applicable to transfers contained in this Article 17. For purposes of a transfer made pursuant to this Section 17.6, there shall be no transfer fee charged by FSI; provided that FSI reserves the right to charge tuition for any training necessitated by the transfer. Failure to transfer the interest within said period of time shall constitute a breach of this Agreement. The term "permanent disability" shall mean a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee (or an owner controlling a Franchisee entity) from supervising the management and operation of the FAT SHACK Restaurant for a period of 120 days from the onset of such disability, impairment or condition. In any event, the FAT SHACK Restaurant shall at all times be managed by a General Manager who has complied with all of FSI's training requirements, regardless of any death or permanent disability covered by this Section 17.6.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack FDD, there is a specific condition where Fat Shack will not charge a transfer fee. If a transfer occurs due to the death or permanent disability of the franchisee, Fat Shack will waive the transfer fee. However, this waiver is contingent on the transfer occurring within a reasonable time, specifically within 120 days from the date of death or permanent disability, unless probate proceedings extend this period.
Even when the transfer fee is waived due to death or disability, Fat Shack retains the right to charge tuition for any training that the new franchisee or manager might require as a result of the transfer. This ensures that the restaurant continues to be managed and operated according to Fat Shack's standards, regardless of the circumstances leading to the transfer.
This policy provides some financial relief to the franchisee's family or estate in the event of unforeseen circumstances like death or disability, as it eliminates the standard transfer fee. However, it's important to note that all other terms and conditions applicable to transfers, as outlined in Article 17 of the franchise agreement, still apply. Additionally, the need for and cost of any required training remains the responsibility of the new operator.