When must the Successor Franchise Fee be paid to FSI by a Fat Shack franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
oyees and agents;
- e. Pays a successor franchise fee ("Successor Franchise Fee") in the amount of $6,000.00 upon each exercise of the successor franchise rights and any other fees set forth in the successor franchise rider to cover FSI's expenses related to reviewing Franchisee's operations and approving the option. The Successor Franchise Fee will be due and payable upon execution of FSI's then current Franchise Agreement and will be nonrefundable under all circumstances once paid. The Successor Franchise Fee is paid in lieu of an additional initial
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee must pay the Successor Franchise Fee of $6,000 upon execution of Fat Shack's then-current Franchise Agreement to exercise their successor franchise rights. This fee covers Fat Shack's expenses for reviewing the franchisee's operations and approving the option.
The Successor Franchise Fee is nonrefundable under all circumstances once paid. This means that even if the successor franchise agreement is later terminated or not executed for any reason after the fee is paid, the franchisee will not receive a refund of the $6,000. This fee is paid in place of an additional initial franchise fee, which is a benefit to the franchisee.
To be eligible for successor franchise rights, the franchisee must meet several prerequisites. These include executing the current Franchise Agreement (which may have different terms), not being in default of the existing agreement, agreeing to upgrade the Fat Shack restaurant to meet current standards, and executing a release of claims against Fat Shack. Meeting these conditions is essential for a franchisee to be able to renew their franchise and continue operating under the Fat Shack brand.