What is the minimum number of Fat Shack restaurants a franchisee must develop under the Development Agreement, in addition to the one opened under the Initial Franchise Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| FAT SHACK Restaurant Number | Date by Which Franchise Agreement Must be Signed and Must be Submitted to FSI | Date by Which the FAT SHACK Restaurant Must be Opened | Cumulative Number of FAT SHACK Restaurants Required to be Opened and Continuously Operated by Franchisee as of the Date in Preceding Column |
|---|---|---|---|
| 1 | Date of this Development Agreement | 1 | |
| 2 | 2 | ||
| 3 | 3 | ||
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the Development Agreement outlines the schedule for developing Fat Shack restaurants in a protected area. The franchisee is obligated to adhere strictly to this schedule. The franchisee must maintain continuous operation of at least the number of Fat Shack restaurants as specified in the Development Schedule. The table provided shows a cumulative number of Fat Shack restaurants required to be opened and continuously operated by the franchisee.
According to the table, by the time the Franchise Agreement is signed, the franchisee is required to have one Fat Shack restaurant open. Subsequently, the cumulative number increases to two and then three, implying that the franchisee must open at least two additional Fat Shack restaurants beyond the initial one. Therefore, in addition to the initial restaurant opened under the Initial Franchise Agreement, a franchisee must develop at least two more Fat Shack restaurants under the Development Agreement.
It is important to note that the Development Agreement requires the franchisee to follow a strict timeline for opening these restaurants, and failure to comply with the schedule can result in termination of the agreement. The franchisee must also secure Fat Shack's approval before entering into any contract for purchasing or leasing premises for a Fat Shack restaurant. This ensures that all locations meet the franchisor's standards and align with the brand's image.