When is the Royalty fee due for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Type of Fee | Amount | Due Date | Remarks |
| Royalty1 | 6% of your Gross Sales2 | Payable weekly on Tuesday of each week based on the prior week's Gross Sales | The Royalty is for the ongoing grant of the rights to use the Marks and Licensed Methods, and on-going support. We will debit your bank account for the Royalty.3 You must meet minimum Sales Quota. See Item 12. |
| Marketing and Promotion Fee1 | None, but we reserve the right to charge up to 1½% of your Gross Sales2 | Payable with the Royalty Fee | We may collect a Marketing and Promotion Fee starting upon 30 days' notice to you. Once commenced, we will debit your bank account for amounts due.3 We may reallocate all or a portion of this fee to a Regional Advertising Program if one is established in your region. You must meet minimum Sales Quota. See Item 12. |
| Initial Training Program Expenses4,5 | Costs associated with attending our initial training program | As incurred | Payable to third party suppliers. |
| On-site Opening Assistance Fee1 | $195 per day for each day the on-site opening assistance is provided | As incurred | Only payable if our representatives must travel more than 100 miles and incur room and board expenses in providing this assistance. |
Source: Item 6 — Other Fees (FDD pages 15–18)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the royalty fee is due weekly. Specifically, it is payable each Tuesday, based on the prior week's gross sales. The royalty fee is 6% of your Gross Sales. Fat Shack will debit the franchisee's bank account for the royalty fee.
It is important to note that before opening a Fat Shack restaurant, franchisees must sign and deliver documents to Fat Shack and their bank, allowing Fat Shack to debit their bank account weekly for royalty and marketing and promotion fees, as well as other payments due under the Franchise Agreement. Franchisees must notify Fat Shack within one day if they change their account or transfer it to a different bank, and provide new documents to permit the debits within three days. However, Fat Shack retains the right to require payment by other means if deemed appropriate.
In addition to the royalty fee, Fat Shack reserves the right to charge a Marketing and Promotion Fee of up to 1½% of gross sales, payable with the royalty fee. This fee may be allocated to a Regional Advertising Program if one is established in the franchisee's region. Franchisees must also meet minimum sales quotas, as detailed in Item 12 of the FDD.