Must each Fat Shack restaurant established under the development agreement have its own franchise agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
FSI grants to Franchisee the right to develop and establish FAT SHACK Restaurants using FSI's Marks and Licensed Methods in the geographic area described in the Addendum (the "Protected Area"). Franchisee accepts this grant and undertakes the obligation to develop and operate the FAT SHACK Restaurants in compliance with FSI's standards. Each FAT SHACK Restaurant shall be established and operated pursuant to a separate Franchise Agreement to be entered into between the parties. The term "Franchise Agreement" means the then-current form of Franchise Agreement used by FSI for granting franchises to FAT SHACK Restaurant franchisees, including all ancillary documents FSI may require.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, each Fat Shack restaurant developed under a development agreement must operate under a separate Franchise Agreement. Specifically, the franchisee is obligated to develop and operate Fat Shack restaurants in compliance with Fat Shack's standards, with each restaurant being established and operated under its own Franchise Agreement.
The Development Agreement grants the franchisee the right to develop Fat Shack restaurants within a specified geographic area, known as the Protected Area. To develop each Fat Shack restaurant, the franchisee must exercise their development rights by entering into a Franchise Agreement with Fat Shack. This agreement outlines the terms and conditions for operating that specific Fat Shack location.
This requirement ensures that each Fat Shack restaurant operates according to the brand's standards and procedures, as defined in the Franchise Agreement. It also allows Fat Shack to maintain control over the quality and consistency of its brand across all locations developed under the Development Agreement. The franchisee must adhere to the Development Schedule and meet deadlines for executing each Subsequent Franchise Agreement, with failure to do so potentially resulting in termination of the Development Agreement.