What is the meaning of 'court of competent jurisdiction' in the context of legal proceedings against Fat Shack?

According to the 2025 Fat Shack Franchise Disclosure Document, a 'court of competent jurisdiction' refers to a court that has the legal authority to hear and resolve a specific type of case. In the context of the Fat Shack franchise agreement, this term is relevant when Fat Shack initiates legal proceedings against a franchisee that are not subject to mandatory arbitration.

Specifically, Fat Shack retains the right to bring legal proceedings against a franchisee in any court of competent jurisdiction within the country, state, province, or geographic area where the Fat Shack restaurant is located or where the franchisee resides or owns assets. This means Fat Shack is not restricted to the state and federal courts of Colorado (the state where Fat Shack is headquartered) if it sues a franchisee. Instead, Fat Shack can choose a court closer to the franchisee's location, potentially making it more convenient and cost-effective for Fat Shack to pursue the case.

This clause provides Fat Shack with flexibility in choosing the venue for legal proceedings, potentially creating a strategic advantage for the franchisor. A prospective franchisee should consider the implications of this clause, as it could mean facing legal action in a jurisdiction far from their primary place of business or residence. It is advisable to consult with a legal professional to fully understand the potential ramifications of this clause and how it might affect them in the event of a dispute with Fat Shack.