Is Fat Shack obligated to select or acquire a site on behalf of the franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
further provided in Article 4 below.
- 3.3. Franchisee shall not, without the prior written approval of FSI and without signing a Subsequent Franchise Agreement related to the FAT SHACK Restaurant for a particular location, enter into any contract for the purchase or lease of any premises for use as a FAT SHACK Restaurant. FSI will assist Franchisee in the selection and approval of locations for its FAT SHACK Restaurants in accordance with the terms and conditions of the applicable Subsequent Franchise Agreement. Franchisee acknowledges that FSI has no obligation to select or acquire a location on behalf of Franchisee.
- 3.4. Each Subsequent Franchise Agreement to be executed by Franchisee for each FAT SHACK Restaurant to be developed hereunder shall be in the form of Franchise Agreement then generally being offered to franchisees by FSI, which may contain terms subsequently different then the terms of the Initial Franchise Agreement. Notwithstanding the foregoing, FSI agrees that it will not charge an Initial Franchise Fee to Franchisee which is greater than the amounts set forth in Section 2.1. above. Franchisee acknowledges that FSI has the right, however, to charge then current published rates for the required products, royalty percentages, advertising contributions and other fees, products and services offered to Franchisee.
- 3.5. Franchisee acknowledges that FSI shall have the right, in FSI's sole discretion, to waive the initial training program, which is the same as or similar to the training provided under Section 7.1 of the Initial Franchise Agreement, for the second and each subsequent FAT SHACK Restaurant developed under the terms of this Development Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack is not obligated to select or acquire a site on behalf of the franchisee. However, Fat Shack will assist the franchisee in the selection and approval of locations for their Fat Shack restaurant. This assistance includes providing general criteria for a satisfactory site and determining whether a proposed site fulfills the necessary criteria before formal acceptance of the site selected by the franchisee. Fat Shack bases its approval on the information submitted by the franchisee. Ultimately, the responsibility for site selection, acquisition, and development rests solely with the franchisee, unless otherwise specified in a written agreement with Fat Shack.
Fat Shack's assistance in site selection does not imply or guarantee the success or profitability of the location. The franchisee is responsible for submitting a completed site submittal package with all required information for Fat Shack to assess the proposed location. Fat Shack's approval of a site does not constitute a guarantee, recommendation, or endorsement of the location or target area. The success of the Fat Shack restaurant depends on the franchisee's abilities as an independent businessperson.
While Fat Shack offers assistance, franchisees should be aware that they are responsible for ensuring the site complies with all local ordinances, building codes, and zoning regulations. The franchisee is also responsible for negotiating the lease and ensuring that its terms are favorable. Fat Shack's review of the lease protects its own interests and does not guarantee the location's suitability or the business's success. Franchisees should conduct their own due diligence and seek independent advice to ensure they select a viable location for their Fat Shack restaurant.