Can Fat Shack place advertising directly instead of engaging an advertising agency?

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack has the option to handle advertising directly instead of hiring an advertising agency. If Fat Shack chooses to do so, it is entitled to receive a fee for these services. However, this fee cannot exceed the highest rate charged for similar services by a recognized advertising agency not owned by Fat Shack or its officers, directors, or employees. In addition to the fee, Fat Shack is also entitled to reimbursement for any costs incurred while providing these services.

This arrangement provides Fat Shack with flexibility in managing its advertising and promotional activities. It also ensures that franchisees are not overcharged if Fat Shack decides to handle advertising internally, as the fee is capped at the rate charged by independent advertising agencies. This could potentially lead to cost savings for the Marketing and Promotion Fund, which benefits all Fat Shack franchisees.

It's important for prospective franchisees to understand how the Marketing and Promotion Fund is managed and how advertising decisions are made. The FDD also states that Fat Shack will provide an annual unaudited summary report on the operation of the Marketing and Promotion Fund, available to franchisees upon written request, within 120 days after the end of each calendar year. Reviewing these reports can help franchisees stay informed about how their Marketing and Promotion Fees are being used and whether Fat Shack's direct advertising efforts are proving effective.