Does Fat Shack require approval of the lease or purchase agreement for the restaurant before signing?

We must approve any lease or, if applicable, any purchase agreement for your FAT SHACK Restaurant before you sign any of these agreements. We do not charge for up to two lease or purchase agreement reviews. If we are required to approve more than two leases or purchase agreements, we charge you a fee plus our out-of-pocket costs for our lost opportunity and legal and other expenses incurred for this additional review for each lease or purchase agreement after the first two. A signed copy of the lease must be delivered to us within 15 days after signing.

The primary lease must contain certain provisions granting us certain rights, as your franchisor, including:

• (i) The initial term of the lease, or the initial term together with any renewal terms (for which rent must be specified in the lease) must be for at least seven years;
• (ii) The lease must give the landlord's consent to your use of the Marks and signage which we initially prescribe for the FAT SHACK Restaurant;
• (iii) We must have the right to enter the premises to make any modification necessary to protect the Marks and the Licensed Methods;
• (iv) We or our designee, without the landlord's approval, must have the option to assume your occupancy rights under the existing lease terms and have the right to assign the lease or sublet the premises, for all or any part of the lease term, if you are in default under the lease or the Franchise Agreement or if the lease or Franchise Agreement is terminated;
• (v) Your landlord must agree to provide us with a notice of default and an opportunity to cure any default; and
• (vi) The lease must contain a use provision which is acceptable to us, including the requirement that only a FAT SHACK Restaurant may be operated on the premises without our prior written consent.

Your lease is then conditionally assigned to us as security for your timely performance of all obligations under the Franchise Agreement. You are responsible for obtaining the landlord's consent to the conditional assignment. A copy of a standard form of Conditional Assignment of Lease is attached to this Disclosure Document as Attachment D.

You must, at your expense, ensure that the FAT SHACK Restaurant is constructed, converted, designed and decorated, including installing outdoor signage, in accordance with our plans and specifications, through the assistance of contractors, architects and suppliers designated or approved by us. See also Item 7 for a discussion of related fees.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)