Does Fat Shack reserve the right to require franchisees to have their financial statements reviewed by an accountant on an annual basis?

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack does reserve the right to require franchisees to have their financial statements reviewed annually by an accountant. Specifically, Fat Shack franchisees must provide income statements monthly within 15 days of the month's end, and annual income statements and balance sheets within 90 days of the fiscal year's end. These financial reports must adhere to Generally Accepted Accounting Principles (GAAP) and be in Fat Shack's recommended format.

This requirement means that as a Fat Shack franchisee, you might incur additional expenses for accounting services if Fat Shack exercises its right to mandate a review. While franchisees are already obligated to provide regular financial reports, this clause gives Fat Shack the power to demand a higher level of scrutiny, potentially adding to the operational costs.

It is important to note that failure to provide the required financial statements more than two times in any 12-month period allows Fat Shack to require the franchisee to use a bookkeeping service designated by Fat Shack. This could further increase expenses and reduce the franchisee's autonomy in managing their finances. Prospective franchisees should consider these potential costs and restrictions when evaluating the Fat Shack franchise opportunity.