What is the maximum Marketing and Promotion Fee that Fat Shack may require?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Marketing and Promotion Fund Contribution. We currently do not collect a Marketing and Promotion Fee, nor have we established a National Marketing and Promotion Fund or program. However, upon not less than 30 days' notice, we may require you to remit to us a Marketing and Promotion Fee of up to 1½ percent of Gross Sales. We may change the percentage of the Marketing and Promotion Fee upon 30 days' notice, but not above 1½ percent of Gross Sales. The Marketing and Promotion Fee is due to us along with your Royalty Fee payment, payable weekly by automatic transfer on Tuesday of each week, based on the amount of Gross Sales in the previous week. The Marketing and Promotion Fee will be placed in a separate account ("Marketing and Promotion Fund") will be accounted for separately. All company-owned and affiliate-owned FAT SHACK Restaurants will pay into the Marketing and Promotion Fund on an equal percentage basis with all franchised FAT SHACK Restaurants.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–36)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the company currently does not collect a Marketing and Promotion Fee, nor have they established a National Marketing and Promotion Fund or program. However, Fat Shack retains the right to implement such a fee in the future.
If Fat Shack decides to implement a Marketing and Promotion Fee, they must provide franchisees with at least 30 days' notice. The maximum fee that Fat Shack can charge is 1½ percent of Gross Sales. Fat Shack also retains the right to change the percentage of the Marketing and Promotion Fee with 30 days' notice, but it cannot exceed the 1½ percent of Gross Sales cap.
The Marketing and Promotion Fee, if implemented, would be due along with the Royalty Fee payment. These payments are payable weekly by automatic transfer on Tuesday of each week, based on the Gross Sales from the previous week. The collected fees will be placed in a separate account called the "Marketing and Promotion Fund" and will be accounted for separately. All company-owned and affiliate-owned Fat Shack restaurants will contribute to the Marketing and Promotion Fund on an equal percentage basis with all franchised Fat Shack restaurants.