Does Fat Shack require franchisees to have their location approved?
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, franchisees must have their restaurant location approved by Fat Shack. The franchisor also reviews the lease or purchase agreement for the location. This review is conducted solely for Fat Shack's benefit to ensure the location meets their minimum criteria and protects their interests. Fat Shack will review up to two leases or purchase agreements without charging an additional fee.
If Fat Shack is required to review three or more leases or purchase agreements, the franchisee must pay a $750 Lease Review Fee, in addition to Fat Shack's out-of-pocket costs for the review and any potential negotiations. This fee is due when the third and each subsequent lease is submitted for review. Fat Shack retains the right to waive all or part of the Lease Review Fee for additional sites if deemed appropriate.
The FDD emphasizes that neither Fat Shack nor its advisors represent the franchisee's interests during the lease review and approval process. Franchisees are strongly encouraged to seek independent legal counsel or professional advisors to review the lease or purchase agreement, with the franchisee bearing the costs for these services in addition to the Lease Review Fee, if applicable. Franchisees are explicitly prohibited from signing a lease that has not been approved by Fat Shack.
This location approval process is a common practice in franchising, intended to ensure that the chosen site is suitable for the business and aligns with the brand's standards. However, the franchisee should be aware that Fat Shack's approval primarily serves the franchisor's interests, highlighting the importance of independent due diligence and legal advice for the franchisee.