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 franchisor's approval process for restaurant locations, as described in Item 12?

You must select the premises for your FAT SHACK Restaurant and sign a lease or otherwise acquire the right to use the location. We do not generally own the premises that franchisees lease for their FAT SHACK Restaurants, and instead the property is typically leased from a third party. If we approve the location, we may assist you in negotiating your lease, or, if applicable, purchase agreement, to ensure that it meets our minimum requirements, although we have no obligation to do so. If we do not approve your site, you must propose a new site. You must not, without our prior written approval, enter into any contract or letter of intent to contract to purchase or lease the premises you intend to use as a Restaurant

Location. We consider the following factors when we approve or disapprove your proposed Restaurant Location: the nature and location of other competitive FAT SHACK Restaurants and potential customers, population density, location to college campuses, traffic patterns and other factors we deem relevant on a case by case basis. There is no contractual limit on the time it takes us to approve or disapprove your proposed site and lease. Once we have all of the necessary documentation for review, we typically take 30 days to approve or disapprove your proposed Restaurant Location and lease.

We usually submit our initial lease review comments to you, or if we agree, to your landlord, within one to two weeks after receiving your lease but the entire lease negotiation process typically takes anywhere from two weeks to two months depending on the landlord's responsiveness. Our review and approval of your lease, or, if applicable, purchase agreement, is conducted solely for the purpose of determining that it meets our minimum criteria for the operation of a FAT SHACK Restaurant and that our interests and those of our affiliates are protected. The legal counsel and any other professional advisors we engage to assist with the review will be acting only on our behalf and will not be representing you or your interests in relation to the review and approval. We recommend that you have your own attorney review the lease on your behalf.

You must select your Restaurant Location and sign a lease or otherwise acquire the right to use the location within 270 days of signing the Franchise Agreement. We will extend this deadline for up to three successive 90-day periods if (i) factors beyond your reasonable control prevent you from meeting the applicable deadline, (ii) you have made reasonable and continuing efforts to obtain and submit for approval an acceptable site and lease, (iii) you deliver a written request to extend the time to sign a lease at least five days prior to the applicable deadline, and (iv) for any extensions past the first 90-day extension, at the time you deliver the written request to us, you pay us the Site Acquisition Extension Fee for each additional 90-day extension period. You do not have any right to extend these deadlines if you are otherwise in default of the Franchise Agreement or any other agreement with us.

If you do not agree with the lease provisions that we give to you or have negotiated with the landlord (if we become involved in that process), you need not move forward with the particular site but then you must find another suitable site for the Restaurant Location. If we object to a lease provision during our review of the lease, then the lease provision must be changed in a manner that is acceptable to us or removed, or you must find another suitable site for the Restaurant Location with lease terms that are acceptable to us. We may charge you an additional fee for reviewing another lease (Section 6.4, Franchise Agreement). If you have failed to obtain our approval for your site within the time frame indicated in this paragraph, then we may terminate your Franchise Agreement.

If you enter into a Development Agreement to open and operate multiple FAT SHACK Restaurants, our approval of your future Restaurant locations will be under our then current site selection criteria.

Schedule For Opening

We estimate that the typical length of time between the date you sign the Franchise Agreement and the date your FAT SHACK Restaurant opens will be three to 12 months. The factors which may affect this time period are your ability to locate a site, secure financing, and obtain a lease;