How often is the Fat Shack Royalty fee payable?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Type of Fee | Amount | Due Date | Remarks |
| Royalty1 | 6% of your Gross Sales2 | Payable weekly on Tuesday of each week based on the prior week's Gross Sales | The Royalty is for the ongoing grant of the rights to use the Marks and Licensed Methods, and on-going support. We will debit your bank account for the Royalty.3 You must meet minimum Sales Quota. See Item 12. |
| Marketing and Promotion Fee1 | None, but we reserve the right to charge up to 1½% of your Gross Sales2 | Payable with the Royalty Fee | We may collect a Marketing and Promotion Fee starting upon 30 days' notice to you. Once commenced, we will debit your bank account for amounts due.3 We may reallocate all or a portion of this fee to a Regional Advertising Program if one is established in your region. You must meet minimum Sales Quota. See Item 12. |
| Initial Training Program Expenses4,5 | Costs associated with attending our initial training program | As incurred | Payable to third party suppliers. |
Source: Item 6 — Other Fees (FDD pages 15–18)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the royalty fee is payable weekly. Specifically, it is due each Tuesday, based on the prior week's gross sales. The royalty fee is 6% of your Gross Sales. Fat Shack will debit the franchisee's bank account for the royalty fee.
It is common practice in the franchise industry to have royalty fees paid on a weekly or monthly basis. Weekly payments, as required by Fat Shack, provide the franchisor with a more consistent cash flow. This also requires the franchisee to maintain diligent accounting practices to accurately calculate and remit the fees on time.
Additionally, before opening a Fat Shack restaurant, franchisees must sign and deliver documents that permit Fat Shack to debit their bank account weekly for royalty and marketing and promotion fees, as well as other payments due under the Franchise Agreement. Franchisees must notify Fat Shack within one day if they change their account or transfer their account to a different bank, and sign and deliver new documents to permit Fat Shack to debit the new bank account within three days. Fat Shack retains the right to require payment by means other than automatic debit whenever they deem appropriate.