What section of the Fat Shack agreement is deleted in its entirety regarding Commencement of Operations?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Section 22.5 is deleted and replaced with the following language:
The United States Federal Arbitration Act shall govern all questions about the enforceability of Sections 22.1 and 22.2 and the confirmation of any arbitration awards pursuant to such procedures, and no arbitration issues are to be resolved pursuant to any other statutes, regulations or common law. Otherwise, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.) or other United States federal law, disputes related to a violation of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act shall be governed thereby, and all other matters regarding this Agreement shall be interpreted under the laws of the State of Colorado and any dispute between the parties shall be governed by and determined in accordance with the internal substantive laws, and not the laws of conflict, of the State of Colorado, which laws shall prevail in the event of any conflict of law. Notwithstanding the foregoing, the parties agree that the Colorado Consumer Protection Act (COLO. REV. STAT. ANN. Sections 6-1-101, et seq.) shall not apply to this Agreement or any disputes between the parties. Subject to the foregoing, Franchisee and FSI have negotiated regarding a forum in which to resolve any disputes that arise between them and have agreed to select a forum in order to promote stability in their relationship. Therefore, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, as specified in Section 22.1, involving Franchisee and/or the Franchisee Affiliates, on the one side, and FSI and/or the FSI Affiliates, on the other side, both parties agree that the exclusive venue for disputes between them shall be in the state and federal courts of Colorado, and each waive any objection either may have to the personal jurisdiction of or venue in the state and federal courts of Colorado. Notwithstanding the foregoing, any legal proceeding by FSI or any FSI Affiliate not subject to mandatory arbitration may be brought in any court of competent jurisdiction in the country, state, province, or other geographic area in which the FAT SHACK Restaurant is located or in which Franchisee or any Franchisee Affiliate resides or owns assets. IF A CLAIM MAY BE BROUGHT IN COURT, THEN FSI, THE FSI AFFILIATES, FRANCHISEE AND THE FRANCHISEE AFFILIATES EACH WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, there is no mention of a section being deleted in its entirety regarding the Commencement of Operations. However, Section 22.5 is deleted and replaced with new language regarding the United States Federal Arbitration Act governing enforceability questions and the confirmation of arbitration awards. It also specifies that disputes related to violations of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act will be governed accordingly, while all other matters will be interpreted under Colorado law. This section also includes a waiver of a jury trial if a claim is brought in court.
Additionally, the document states that Sections 18.3, 18.4, and 18.5 are deleted in their entirety and replaced with new text. Section 18.3 discusses that at the end of the agreement term, the franchisee has no option to obtain a successor franchise, and the agreement will expire. Section 18.4.c discusses that the franchisee is required to upgrade and remodel its Fat Shack restaurant to conform with FSI's current Operations Manual requirements.
Prospective franchisees should carefully review these modified sections with legal counsel to understand their rights and obligations regarding dispute resolution, governing law, and the terms of franchise renewal or expiration. Understanding these clauses is crucial for navigating potential legal issues and ensuring compliance with the franchise agreement.