What is the standard for transfer fees charged to a Fat Shack franchisee in Washington?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
orporated herein by reference.
- 5.3. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee and/or the proposed transferee shall pay to FSI the standard transfer fee for each franchise agreement to be transferred, as governed by such franchise agreement executed pursuant to this Development Agreement, plus $5,000.00 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This sum shall be payable in lump sum to FSI as one of the preconditions to obtaining FSI's written consent to any proposed transfer. In the event of transfer, the transferee shall pay the remaining portions of the Initial Franchise Fees owed to FSI, when each Subsequent Franchise Agreement is signed. Transfer fees paid to FSI will not be applied to the Initial Franchise Fees due, but the transferee will receive credit for Franchisee's earlier payment of the Development Fees.
- 5.4. A condition of FSI's approval of a transfer of this Development Agreement is that Franchisee must transfer all of its interest under this Development Agreement, and shall not be permitted to transfer any portion of this Development Agreement separate and apart from the remainder of this Development Agreement. Any transfer shall include the rights to all Franchise Agreements entered into between FSI and Franchisee hereunder. Franchisee and the transferee shall comply with the requirements under each Franchise Agreement entered into between FSI and Franchisee for the transfer of each such Franchise Agreement, including the payment of the applicable transfer fee for each Franchise Agreement.
- 5.5.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, in the event of a transfer of a franchise, the franchisee or the proposed transferee must pay Fat Shack the standard transfer fee for each franchise agreement being transferred. If the franchisee has a Development Agreement, they must also pay $5,000 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This payment is a prerequisite for obtaining Fat Shack's written consent to the transfer.
The transfer fees paid to Fat Shack will not be applied to any Initial Franchise Fees that may be due. However, the transferee will receive credit for the franchisee's earlier payment of the Development Fees. The franchisee must transfer all interests under the Development Agreement and cannot transfer only a portion of it. Any transfer must include the rights to all Franchise Agreements between Fat Shack and the franchisee.
It is important to note that the specific amount of the 'standard transfer fee' is not specified in this excerpt. A prospective franchisee should inquire with Fat Shack about the current standard transfer fee and ensure they understand all conditions and costs associated with transferring a franchise. This will help in making an informed decision about purchasing a Fat Shack franchise.