How many additional terms can a Fat Shack franchisee renew or extend the franchise for?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or | Summary | |
|---|---|---|---|
| Other Agreement | |||
| a. Length of the franchise term | Section 18.1 of Franchise Agreement (“FA”); Article 4 of Development Agreement (“DA”) | 7 years for the Franchise Agreement. For the Development Agreement, the term extends until the earlier of the date that you sign the Franchise Agreement for the final FAT SHACK Restaurant to be developed under the Development Agreement or the deadline in the development schedule for signing that Franchise Agreement. | |
| b. Renewal or extension of the | Section 18.3 of FA | Option to renew for up to three additional 5 year terms | |
| term | after the initial term. | ||
| c. Requirements for you to renew or extend | Sections 18.3 and 18.4 of FA | Written notice at least 180 days before expiration, sign then-current form of Franchise Agreement (which may contain materially different terms from your original contract), sign Successor Franchise Rider in the form attached as Attachment F containing a release, be in compliance with Franchise Agreement, pay fee, and renovate (if applicable). |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–46)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement for up to three additional terms, with each term lasting 5 years. This option is detailed in Section 18.3 of the Franchise Agreement.
To exercise this renewal option, the franchisee must meet several requirements. They must provide written notice to Fat Shack at least 180 days before the expiration of the current term. Additionally, they are required to sign the then-current form of the Franchise Agreement, which may include terms that are significantly different from the original agreement. The franchisee must also sign a Successor Franchise Rider, which includes a release, maintain compliance with the existing Franchise Agreement, pay the applicable renewal fee, and complete any required renovations.
It is important for prospective Fat Shack franchisees to understand that the terms of the renewed agreement may differ from the original. This could impact various aspects of the business, including fees, operational requirements, and brand standards. Franchisees should carefully review the renewal conditions and the new Franchise Agreement to fully understand their obligations and rights upon renewal. Consulting with a legal and financial advisor is recommended to assess the implications of the renewal terms.