What are the specific obligations of a Fat Shack franchisee regarding site selection and acquisition/lease, as detailed in Item 9, and how do these obligations relate to the territory granted in Item 12?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
t Assistance
To assist Franchisee in establishing the FAT SHACK Restaurant, FSI shall provide the following:
- a. Assistance related to the acceptance of a site for the FAT SHACK Restaurant, although Franchisee acknowledges that FSI shall have no obligation to select or acquire a site on behalf of Franchisee. FSI's assistance will consist of, at a minimum, the provision of general criteria for a satisfactory site and a determination of whether a proposed site fulfills the requisite criteria prior to formal acceptance of a site selected by Franchisee. FSI bases its approval of any proposed site on information submitted by Franchisee in a form sufficient to allow FSI to assess the proposed location. Site selection, acquisition and development shall be the sole obligation of Franchisee, except as may be set forth in this Agreement or any other written agreement executed by FSI. Franchisee acknowledges that FSI is under no obligation to provide additional site selection services other than as may be set forth in a written, executed agreement and that FSI's acceptance of the site does not imply or guarantee the success or profitability of the site in any manner whatsoever.
- b. Standards and specifications for the build-out, interior design, layout, floor plan, signs, designs, color and decor of the FAT SHACK Restaurant.
- c. Advice regarding the standards and specifications for the equipment, supplies and materials used in, and the menu items offered for sale by, the FAT SHACK Restaurant and advice regarding the selection of suppliers for and the purchasing of such items.
- d. Guidance in implementing grand opening advertising and marketing programs, operating and sales procedures, and bookkeeping and accounting programs.
- e. Initial training in accordance with Section 7.1.
- f. If the FAT SHACK Restaurant to be opened under this Agreement is Franchisee's first FAT SHACK Restaurant, opening assistance consisting of one or more representatives of FSI on site at the Restaurant Location for not less than 30 days to assist Franchisee in opening the FAT SHACK Restaurant; provided, however, that Franchisee shall hire in advance of the opening date and be exclusively responsible for the training, compensation and control of its employees. If FSI's representatives must travel more than 100 miles and incur room and board expenses, Franchisee shall pay FSI $195.00 per day for each day the on-site opening assistance is provided.
- g. One copy of the Operations Manual, as defined and described in Article 8, which shall be loaned to Franchisee during the term of this Agreement.
- h. Upon payment of the purchase price therefor, FSI or its supplier will provide Franchisee with an initial starting package of certain supplies and materials for use in the FAT SHACK Restaurant.
9.2. Responsibilities of Area Representative
FSI reserves the right to retain the services of an area representative or other person ("Area Representative") in the geographic area in which Franchisee's Restaurant will be located. In such event, the Area Representative, on behalf of FSI, will perform certain sales, site assistance and supervisory services directed by FSI.
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchisee is primarily responsible for site selection, acquisition, and development. Fat Shack provides assistance related to site acceptance by offering general criteria for a satisfactory site and determining if a proposed site meets these criteria before formal acceptance. However, the FDD clearly states that Fat Shack has no obligation to select or acquire a site on behalf of the franchisee. The franchisor's approval of a site does not guarantee the success or profitability of the location.
Regarding the territory, a Fat Shack franchisee may receive a "Target Area" to find a Restaurant Location. The designation of the Target Area does not in any manner grant you any continuing territorial rights in or to the Target Area. Once a Restaurant Location is approved, the franchisee may be granted a Protected Territory, typically a three-mile radius around the restaurant, in which Fat Shack will not operate or permit a third party to operate another Fat Shack Restaurant, provided the franchisee remains in substantial compliance with the Franchise Agreement. However, this protected territory does not apply to Captive Audience Venues.
It's important to note that Fat Shack franchisees do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other distribution channels. Fat Shack retains the right to market and sell products and services through other venues and channels, even within a franchisee's Protected Territory. Furthermore, franchisees must obtain Fat Shack's prior written approval before entering any contract for the purchase or lease of premises for a Fat Shack Restaurant, and Fat Shack will assist in the selection and approval of locations according to the terms of the Franchise Agreement.