Does a Fat Shack restaurant in a Captive Audience Venue have a Protected Territory?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the paragraph below regarding Captive Audience Venues and Special Venues and Channels noted below, you will be granted a geographic area around your Restaurant Location (the "Protected Territory") in which we will not operate, nor permit a third party to operate, a FAT SHACK Restaurant as long as you are in substantial compliance with all the provisions of the Franchise Agreement. The Protected Territory is an area encompassing a three mile radius around the FAT SHACK Restaurant as measured from the front door of the Restaurant. A FAT SHACK Restaurant at a Captive Audience Venue does not have a Protected Territory.
Source: Item 12 — Territory (FDD pages 36–39)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a Fat Shack restaurant located in a Captive Audience Venue does not have a Protected Territory. A Protected Territory is a geographic area around the restaurant location where Fat Shack will not operate, nor permit a third party to operate, another Fat Shack restaurant, provided the franchisee remains in substantial compliance with the Franchise Agreement. For standard Fat Shack locations, this Protected Territory encompasses a three-mile radius around the restaurant, measured from the front door.
The FDD defines Captive Audience Venues as locations such as airports, transportation hubs, hospitals, convention centers, grocery stores, department stores, big box retail centers, resorts, sports arenas, stadiums, hotels, office buildings, and military installations. Fat Shack retains the right to market, offer, and sell products and services through these Captive Audience Venues, potentially in close proximity to a franchisee's location, without providing any compensation to the franchisee.
This lack of a Protected Territory in Captive Audience Venues means that Fat Shack could potentially open another location nearby, even within the three-mile radius that would typically be protected for a standard franchise. This is a significant consideration for prospective franchisees evaluating the potential for competition and market saturation, especially if their location is near a Captive Audience Venue.