What is the Noncompliance Service Charge for Fat Shack, and how does it escalate with repeated notices?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Noncompliance Service Charge1 | No charge for first written notice of noncompliance, up to $150 per event of noncompliance for second notice, up to $500 per event of noncompliance for third notice, and up to $1,000 per event of noncompliance for fourth and later notices | As incurred | We have the right to impose this charge, in addition to our other rights and remedies, if you are not in compliance with your Franchise Agreement or our standards and specifications. |
Source: Item 6 — Other Fees (FDD pages 15–18)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, franchisees may incur a Noncompliance Service Charge if they fail to comply with the Franchise Agreement or Fat Shack's standards and specifications. The charge is not applied for the first written notice of noncompliance. However, the fee escalates with subsequent notices for the same event.
For a second notice of noncompliance, Fat Shack may charge up to $150 per event. This means that if a franchisee repeats the same violation after receiving an initial warning, they will be assessed this fee. The charge increases to up to $500 per event for a third notice, indicating that Fat Shack imposes progressively higher penalties for continued noncompliance.
For the fourth and any subsequent notices regarding the same noncompliance event, the Noncompliance Service Charge can reach up to $1,000 per event. This significant increase underscores the importance of addressing and correcting any issues identified in the initial notices to avoid substantial financial penalties. This fee is in addition to any other rights and remedies Fat Shack may have.