What is the limitation on transfer fees for a Fat Shack franchise in Washington?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
orporated herein by reference.
- 5.3. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee and/or the proposed transferee shall pay to FSI the standard transfer fee for each franchise agreement to be transferred, as governed by such franchise agreement executed pursuant to this Development Agreement, plus $5,000.00 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This sum shall be payable in lump sum to FSI as one of the preconditions to obtaining FSI's written consent to any proposed transfer. In the event of transfer, the transferee shall pay the remaining portions of the Initial Franchise Fees owed to FSI, when each Subsequent Franchise Agreement is signed. Transfer fees paid to FSI will not be applied to the Initial Franchise Fees due, but the transferee will receive credit for Franchisee's ea
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
Based on the 2025 Fat Shack Franchise Disclosure Document, the document does not specify any limitations on transfer fees for franchises located in Washington. The FDD states that in the event of a proposed sale, transfer, or assignment by the franchisee, the franchisee and/or the proposed transferee must pay Fat Shack the standard transfer fee for each franchise agreement to be transferred, as governed by the franchise agreement, plus $5,000 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This payment is a precondition for obtaining Fat Shack's written consent to any proposed transfer.
In the event of a transfer, the transferee is also responsible for paying the remaining portions of the Initial Franchise Fees owed to Fat Shack when each Subsequent Franchise Agreement is signed. It's important to note that transfer fees paid to Fat Shack will not be applied to the Initial Franchise Fees due, but the transferee will receive credit for the franchisee's earlier payment of the Development Fees.
Prospective Fat Shack franchisees in Washington should be aware that the transfer fee can vary depending on the number of undeveloped franchise rights. It is important to carefully review the franchise agreement to understand the specific transfer fee applicable to their situation. Since the FDD does not specify any limitations to transfer fees in Washington, it is important to discuss this with the franchisor.