Is permission for inspection of a manufacturer's, supplier's, or distributor's facilities a condition for continued approval by Fat Shack?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall purchase all equipment, products, services, supplies and materials required for the operation of the FAT SHACK Restaurant licensed herein, from manufacturers, suppliers or distributors designated by FSI or, if there is no designated supplier for a particular product, service, supply or material, from such other suppliers who meet all of FSI's specifications and standards as to quality, composition, finish, appearance and service, and who shall adequately demonstrate their capacity and facilities to supply Franchisee's needs in the quantities, at the times, and with the reliability requisite to an efficient operation. FSI reserves the right to designate, from time to time, a single supplier for any services, products, equipment, supplies or materials and to require Franchisee to use such a designated supplier exclusively, which exclusive designated supplier may be FSI or its affiliates. FSI may require Franchisee to make payments to FSI for the benefit of designated suppliers not affiliated with FSI. FSI and its affiliates may receive payments from suppliers on account of such suppliers' dealings with Franchisee and other franchisees and FSI may use all amounts so received without restriction and for any purpose FSI and its affiliates deem appropriate.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
Based on the 2025 Fat Shack Franchise Disclosure Document, franchisees are required to purchase equipment, products, services, supplies, and materials from manufacturers, suppliers, or distributors designated by Fat Shack. If there is no designated supplier for a particular product, service, supply, or material, the franchisee can use other suppliers who meet Fat Shack's specifications and standards. These suppliers must adequately demonstrate their capacity and facilities to supply the franchisee's needs in the quantities, at the times, and with the reliability required for efficient operation.
Fat Shack retains the right to designate a single supplier for any services, products, equipment, supplies, or materials and require franchisees to exclusively use that supplier, which could be Fat Shack or its affiliates. Fat Shack may also require franchisees to make payments to Fat Shack for the benefit of designated suppliers not affiliated with Fat Shack. Fat Shack and its affiliates may receive payments from suppliers based on their dealings with franchisees, and Fat Shack can use these amounts without restriction for any purpose they deem appropriate.
While the FDD excerpt discusses supplier approval and standards, it does not explicitly state that permission for inspection of a manufacturer's, supplier's, or distributor's facilities is a condition for continued approval. However, the requirement that suppliers demonstrate their capacity and facilities suggests that Fat Shack may require some form of assessment or verification, which could potentially include inspections. A prospective franchisee should clarify with Fat Shack the specific requirements and processes for supplier approval, including whether facility inspections are part of the evaluation process.