Is Fat Shack representing the franchisee's interests when reviewing the lease?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
After you select a location for your FAT SHACK Restaurant, we must approve that location. If the site is approved, we will review your lease, or, if applicable, purchase agreement, for your Restaurant Location. This review is solely for our benefit, and any legal counsel or other professional advisors we engage to assist with the review will be acting only on our behalf. Our approval of a lease indicates only that the lease meets our minimum criteria for the operation of a FAT SHACK Restaurant and that our interests and those of our affiliates are protected. We will review up to two leases or purchase agreements without a charge to you. If we are required to review three or more leases or purchase agreements, you must pay us a $750 fee ("Lease Review Fee") plus our out-of-pocket costs of reviewing and (if we so choose) negotiating the lease. The Lease Review Fee must be paid to us at the time we receive the third and each subsequent lease for our review. We may waive all or a portion of the Lease Review Fee for additional sites if we feel that it is appropriate to do so. Notwithstanding your payment of the Lease Review Fee, neither we nor our legal counsel or other professional advisors involved in the lease review are representing you or your interests in relation to the review and approval. You may elect to hire your own attorney or other professional advisors to review your lease or purchase agreement, and we recommend that you do so. You will pay for their services in addition to the Lease Review Fee. You may not sign a lease that we have not approved.
Source: Item 5 — Initial Fees (FDD pages 13–15)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack does not represent the franchisee's interests when reviewing the lease. While Fat Shack must approve the franchisee's chosen location and will review the lease or purchase agreement, this review is solely for Fat Shack's benefit. Any legal counsel or advisors engaged by Fat Shack will be acting only on Fat Shack's behalf. Fat Shack's approval indicates only that the lease meets their minimum criteria and protects their interests.
Fat Shack will review up to two leases or purchase agreements without charge. However, if they are required to review three or more, the franchisee must pay a $750 Lease Review Fee, plus Fat Shack's out-of-pocket costs. This fee is due upon receiving the third and each subsequent lease for review. Even with the franchisee paying the Lease Review Fee, neither Fat Shack nor their advisors are representing the franchisee's interests.
The FDD emphasizes that franchisees may hire their own attorney or professional advisors to review the lease or purchase agreement, and Fat Shack recommends doing so. The franchisee is responsible for the costs of their own advisors, in addition to the Lease Review Fee, if applicable. The franchisee may not sign a lease that Fat Shack has not approved, highlighting the importance of aligning the franchisee's and franchisor's interests during the lease negotiation process.