factual

Does Fat Shack have an obligation to select or acquire a site on behalf of the franchisee?

Fat_Shack Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 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.
  • a. Assistance related to the acceptance of a site for the FAT SHACK Restaurant, although Franchisee acknowledges that FSI shall have no obligation to select or acquire a site on behalf of Franchisee. FSI's assistance will consist of, at a minimum, the provision of general criteria for a satisfactory site and a determination of whether a proposed site fulfills the requisite criteria prior to formal acceptance of a site selected by Franchisee. FSI bases its approval of any proposed site on information submitted by Franchisee in a form sufficient to allow FSI to assess the proposed location. Site selection, acquisition and development shall be the sole obligation of Franchisee, except as may be set forth in this Agreement or any other written agreement executed by FSI. Franchisee acknowledges that FSI is under no obligation to provide additional site selection services other than as may be set forth in a written, executed agreement and that FSI's acceptance of the site does not imply or guarantee the success or profitability of the site in any manner whatsoever. Franchisee shall execute a lease or otherwise acquire an approved location no later than 270 days from the date this Agreement is signed. FSI will extend the deadline required for Franchisee to acquire its site for up to three successive 90-day periods if (i) factors beyond Franchisee's reasonable control prevent Franchisee from meeting the applicable deadline, (ii) Franchisee has made reasonable and continuing efforts to obtain and submit for approval an acceptable site and lease, (iii) Franchisee delivers a written request to extend the time to sign a lease ("Extension Notice") at least five days prior to the applicable deadline, and (iv) for any extensions past the first 90-day extension, at the time Franchisee delivers the Extension Notice to FSI, Franchisee pays FSI a $500.00 "Site Acquisition Extension Fee" for each additional 90-day extension period. Franchisee shall not have any right to extend the time that Franchisee has to sign a lease under this Agreement if Franchisee is otherwise in default of this Agreement or any other agreement with FSI or if Franchisee has not timely exercised its previous rights to extend the lease execution deadlines set out herein. Under no circumstance, shall FSI allow Franchisee more than a total of 1½ years, including all site acquisition extensions, to locate and acquire the Restaurant Location, either through lease execution or otherwise.

Source: Item 23 — Receipts (FDD pages 53–223)

What This Means (2025 FDD)

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack has no obligation 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 its 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 of any proposed site on information submitted by the franchisee.

Site selection, acquisition, and development are the sole responsibility of the franchisee, unless otherwise agreed in writing. Fat Shack is under no obligation to provide additional site selection services other than what is set forth in a written, executed agreement. Fat Shack's acceptance of a site does not imply or guarantee the success or profitability of the site. The franchisee must select and propose a specific site for the Restaurant Location within the Target Area for Fat Shack's approval.

Franchisees must execute a lease or otherwise acquire an approved location within 270 days from the date the Franchise Agreement is signed. Fat Shack may extend this deadline for up to three successive 90-day periods if certain conditions are met, including factors beyond the franchisee's control preventing them from meeting the deadline, reasonable efforts to obtain an acceptable site and lease, and a written request for an extension. For any extensions past the first 90-day extension, the franchisee must pay Fat Shack a $500 Site Acquisition Extension Fee for each additional 90-day extension period. Under no circumstance, shall Fat Shack allow Franchisee more than a total of 1½ years, including all site acquisition extensions, to locate and acquire the Restaurant Location, either through lease execution or otherwise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.