How long does a Fat Shack franchisee have to satisfy a material judgment before it becomes grounds for termination?

According to the 2025 Fat Shack Franchise Disclosure Document, a franchisee has 30 days to satisfy a material judgment obtained against them. If any material judgment (or several judgments which in the aggregate are material) is obtained against the franchisee and remains unsatisfied or of record for 30 days or longer, it can be grounds for termination of the franchise agreement. However, this 30-day period does not apply if a supersedeas or other appeal bond has been filed.

This means that if a court issues a significant judgment against a Fat Shack franchisee, they must take action to resolve it within 30 days, either by paying the judgment or filing an appeal bond to prevent it from being enforced while they appeal the decision. Failure to do so gives Fat Shack the right to terminate the franchise agreement.

This clause protects Fat Shack from potential financial and reputational damage that could arise if a franchisee has outstanding debts or judgments against them. It is a fairly standard clause in franchise agreements, as franchisors need to ensure the financial stability of their franchisees to protect the overall brand. Prospective franchisees should be aware of this requirement and ensure they have sufficient financial resources or insurance coverage to handle potential legal judgments.