Who is responsible for the costs associated with testing and investigation of unapproved suppliers for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
If you want to purchase or lease any inventory items, products, equipment, supplies, or services we have not approved or through a supplier who we have not previously approved, you must notify us in writing and obtain our approval in advance. The notification should include sufficient specifications, photographs, drawings and other information and samples to determine whether those items or those suppliers meet our specifications. You must reimburse us for the actual cost of any testing and the reasonable cost of investigation to determine whether those items or suppliers meet our specifications. We will advise you within 30 days after we receive all required information and complete any inspection or investigation whether the items or suppliers meet our specifications. We may, in our sole discretion, for any reason whatsoever, elect to withhold approval of the items or suppliers.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee wishes to use a supplier or purchase items not already approved by Fat Shack, the franchisee is responsible for covering the costs of testing and investigation to determine if the supplier or items meet Fat Shack's standards. The franchisee must notify Fat Shack in writing and provide sufficient information, including specifications, photographs, drawings, and samples, for Fat Shack to assess the supplier or items.
Specifically, the franchisee must reimburse Fat Shack for the actual cost of any testing and the reasonable cost of investigation required to determine if the unapproved items or suppliers meet Fat Shack's specifications. Fat Shack will then advise the franchisee within 30 days after receiving all required information and completing any inspection or investigation whether the items or suppliers meet their standards.
Fat Shack retains the discretion to withhold approval of the items or suppliers for any reason. This policy ensures that all products and services used in the Fat Shack franchise meet the franchisor's standards, protecting the brand's reputation and consistency. Franchisees should factor in these potential costs when considering using alternative suppliers or products.