Is Fat Shack restricted from using alternative proprietary marks or methods for other businesses?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
FSI further retains the rights, among others, to: (1) use, and license others to use, the Marks and Licensed Methods in connection with the operation of a FAT SHACK Restaurant at any location other than in the Protected Area, other than Special Venues and Channels and Captive Audience Venue outlets; (2) use and license the use of alternative proprietary marks or methods in connection with the operation of other businesses under names which are not the same as or confusingly similar to the Marks, which businesses may be the same as, or similar to, or different from FAT SHACK Restaurants; (3) establish alternative channels of distribution for the products and services sold in a FAT SHACK Restaurant, which may include marketing and distribution of the products and services through grocery stores, convenience stores, restaurants that are not FAT SHACK Restaurants, via the Internet, catalog sales, and other direct marketing sales channels, which may or may not use the Marks; and (4) engage in any other activities not expressly prohibited in this Agreement or the Franchise Agreement, in each case, at any location, including in your Protected Area, and in each case, on any terms and conditions as FSI deems advisable, without granting Franchisee any rights in them.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, Fat Shack retains the right to use alternative proprietary marks and methods for other businesses. Specifically, Fat Shack can operate other businesses under names that are not the same as or confusingly similar to the Fat Shack marks. These other businesses can be the same as, similar to, or different from Fat Shack Restaurants.
This means that a Fat Shack franchisee's business could potentially compete with other business concepts owned or licensed by Fat Shack, as long as those concepts use different branding. This is a fairly common practice in franchising, where franchisors often have multiple brands or explore different business models.
As a potential franchisee, it's important to understand that Fat Shack has the freedom to explore other business ventures, even if they overlap with the core Fat Shack concept. While these ventures must use different branding, they could still compete for the same customer base or market share. Therefore, a prospective franchisee should consider the potential impact of these other ventures on their own Fat Shack business.