What standards must a Fat Shack franchisee maintain regarding the restaurant's operation?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
s Operations
Franchisee acknowledges that it is solely responsible for the successful operation of its FAT SHACK Restaurant and that the continued successful operation thereof is partially dependent upon Franchisee's compliance with this Agreement and the Operations Manual. In addition to all other obligations contained herein and in the Operations Manual, Franchisee agrees that:
- a. Franchisee shall maintain a clean, safe, and high quality FAT SHACK Restaurant operation and shall promote and operate the business in accordance with the Operations Manual and in such a manner as not to detract from or adversely reflect upon the name and reputation of FSI and the goodwill associated with the FAT SHACK name and Marks.
- Franchisee will conduct itself and operate its FAT SHACK Restaurant in compliance with all applicable laws, regulations and other ordinances and in such a manner so as to promote a good public image in the business community, including, if Franchisee offers alcohol beverages at its FAT SHACK Restaurant, all applicable liquor licensing laws, regulations and ordinances and dram shop laws. In connection therewith, Franchisee will be solely and fully responsible for obtaining any and all licenses to operate the FAT SHACK Restaurant. Franchisee shall keep copies of all health department, fire department, building department and other similar reports of inspections by governmental authorities on file and available for inspection by FSI. Franchisee shall immediately forward to FSI any such reports or inspections in which Franchisee has been found not in compliance with the underlying regulation. Franchisee shall also promptly notify FSI in writing of any notices of default or non-compliance under its lease or any other third-party contracts related to the operation of the FAT SHACK Restaurant, by sending copies of all such notices to FSI. FSI has no obligation to advise Franchisee of any legislative or other legal developments that may affect its FAT SHACK Restaurant. Franchisee is solely responsible for inquiring about and becoming familiar with all applicable laws, ordinances, and regulations, and determining those actions required for compliance. Any information FSI provides to Franchisee regarding applicable laws, ordinances, or regulations does not relieve Franchisee of its responsibility to consult with its own legal advisor and otherwise take appropriate action to inquire about and comply with applicable laws, ordinances, and regulations.
- c. Franchisee acknowledges that proper management of the FAT SHACK Restaurant is important and shall ensure that Franchisee (or its Managing Owner) or a General Manager who has completed the initial training program will be responsible for management of the FAT
SHACK Restaurant after commencement of operations and be present at the Restaurant Location during operation of the FAT SHACK Restaurant. Franchisee shall require each of its General Managers and other employees who have access to the Operations Manual to sign the Nondisclosure and Noncompetition Agreement in a form approved by FSI, and send a copy of such signed agreements to FSI.
- d. Franchisee acknowledges that FSI requires and authorizes Franchisee to offer only authorized products and services as are more fully described in the Operations Manual, which may include, without limitation, "Fat Sandwiches," burgers, wings, other sandwiches, and other authorized food and beverage products, FAT SHACK merchandise, and related products and services. Franchisee shall maintain at all times a sufficient supply of all menu items and related food and paper products to ensure, insofar as possible, that such items are at all times available to its customers. Franchisee acknowledges that a major component of the Licensed Methods is the delivery of its products to customer's residential and work locations, including late night delivery services. Franchisee shall offer all types of services and products as from time to time may be prescribed by FSI and shall not offer any other types of services or products, from or through the FAT SHACK Restaurant, unless FSI's written consent is first obtained.
- e. Franchisee shall not offer, sell or ship any goods or services to other franchisees without FSI's prior written consent.
- f. Franchisee shall engage in all types of advertising, marketing and promotional activities as from time to time may be prescribed by FSI and shall not engage in any advertising, marketing or promotional activities unless FSI's written consent is first obtained.
- g. Franchisee shall promptly pay when due all taxes and other obligations owed to third parties, including without limitation, all federal, state, county and local taxes, and any and all accounts payable or other indebtedness incurred by Franchisee in operating the FAT SHACK Restaurant.
- h. Franchisee shall comply with all agreements with third parties related to the FAT SHACK Restaurant including, in particular, all provisions of any lease for the Restaurant Location. If the term of the lease for the Restaurant Location ends before the term of this Agreement expires, Franchisee shall negotiate a renewal of the lease term in good faith. If Franchisee is unable to renew the lease at the Restaurant Location, Franchisee may find a different site within the original Protected Territory, submit it to FSI for approval with, if applicable, the Relocation Fee, and, following FSI's approval, move Franchisee's FAT SHACK Restaurant to the new location, at Franchisee's sole cost.
- i. Franchisee agrees to renovate, refurbish, remodel or replace, at its own expense, the real and personal property and equipment used in the operation of the FAT SHACK Restaurant, when required by FSI in order to comply with the image, standards of operation and performance capability established by FSI from time to time. If FSI changes its image or standards of operation, it shall give Franchisee a reasonable period of time within which to comply with such changes.
- j. Franchisee shall not operate any other business or profession from or through the FAT SHACK Restaurant. If Franchisee is an entity, the entity shall only operate the FAT SHACK Restaurant governed by this Agreement and no other business, unless Franchisee receives FSI's prior written approval.
- k. Franchisee shall at all times during the term of this Agreement own and control the FAT SHACK Restaurant authorized hereunder. Upon request of FSI, Franchisee shall promptly provide satisfactory proof of such ownership to FSI. Franchisee represents that the Statement of Ownership, attached hereto as Exhibit IV, is true, complete, accurate and not misleading. Franchisee shall promptly provide FSI with a written notification if the information contained in the Statement of Ownership changes at any time during the term of this Agreement and shall comply with the applicable transfer provisions contained in Article 17.
- l. Franchisee shall at all times during the term of this Agreement keep its FAT SHACK Restaurant open during the business hours as may be designated by FSI from time to time in the Operations Manual. At a minimum, Franchisee will remain open until 2:30 a.m. two nights a week, and until 12:30 a.m. five days per week. These minimum standards may be changed by FSI by changes to the Operations Manual. Any deviations from the required hours must be approved in writing by FSI.
- m. Franchisee must offer delivery services through its FAT SHACK Restaurant.
- n. Franchisee shall obtain and maintain computer hardware, software and a high speed Internet connection meeting FSI's standards and specifications as they may exist from time to time. Franchisee shall allow FSI continuous access to the data and information on Franchisee's computers and point of sale system without interruption, except for power outages and other events outside of Franchisee's control. Franchisee agrees that FSI may assign an electronic mail address to Franchisee and Franchisee agrees to use such address to access messages and information posted by FSI and other FAT SHACK franchise owners. Franchisee shall check the e-mail address it designates for notice purposes (and, if applicable, any e-mail address that may be provided by FSI) at least once per business day, and respond to all e-mail messages appropriately within one business day. FSI may post information about Franchisee's FAT SHACK Restaurant on FSI's intranet system and/or on FSI's website(s). In the event FSI sets up an electronic intranet system, Franchisee agrees to participate in FSI's electronic intranet system whereby FSI and all FAT SHACK Restaurant owners and Area Representatives exchange information electronically.
- o.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack FDD, franchisees must adhere to several operational standards to maintain the brand's quality and reputation. This includes maintaining a clean and safe restaurant environment, operating in compliance with all applicable laws and regulations, and promoting a good public image. Franchisees are responsible for obtaining all necessary licenses and keeping records of inspections by governmental authorities, forwarding any non-compliance reports to Fat Shack. Proper management is crucial, requiring the franchisee (or a managing owner/general manager who completed the initial training) to be responsible for the restaurant's operation. Franchisees must also ensure that employees with access to the operations manual sign a Non-disclosure and Non-competition Agreement.
Fat Shack franchisees are required to offer only authorized products and services as detailed in the Operations Manual, which includes Fat Sandwiches, burgers, wings, and other approved food and beverage items, as well as Fat Shack merchandise. Maintaining a sufficient supply of all menu items is essential. Franchisees must offer delivery services and comply with Fat Shack's standards for computer hardware, software, and internet connectivity, allowing Fat Shack continuous access to their data and point of sale systems. Franchisees must also use any assigned electronic mail address to access messages and information posted by Fat Shack and other franchisees, checking it at least once per business day and responding appropriately within one business day.
Additional operational standards include keeping the Fat Shack restaurant open during the hours designated by Fat Shack, with minimum hours being until 2:30 a.m. two nights a week and until 12:30 a.m. five days a week, unless deviations are approved in writing by Fat Shack. Franchisees must accept credit cards, debit cards, and Apple Pay, complying with the Payment Card Industry Data Security Standard (PCI DSS) to protect cardholder information, and cannot charge extra fees for these payment methods. Franchisees must comply with all third-party agreements, particularly lease provisions, and negotiate lease renewals in good faith. They are also responsible for renovations and replacements to maintain the restaurant's image and operational standards as required by Fat Shack, and cannot operate any other business from the Fat Shack location without prior written approval.
Furthermore, Fat Shack franchisees must engage in advertising, marketing, and promotional activities as prescribed by Fat Shack, obtaining written consent for any activities they initiate themselves. They must promptly pay all taxes and obligations to third parties. Franchisees are prohibited from developing any electronic advertising without Fat Shack's prior written consent, as Fat Shack retains exclusive control over electronic advertising content. Franchisees must also maintain insurance coverage as specified by Fat Shack. These comprehensive standards ensure consistency and quality across all Fat Shack locations, protecting the brand's reputation and customer experience.