When is the sum for undeveloped franchise rights payable to FSI for a Fat Shack transfer?
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 wri
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 a franchisee proposes to sell, transfer, or assign their franchise rights, both the franchisee and the proposed transferee must pay Fat Shack, Inc. (FSI) a transfer fee for each franchise agreement being transferred. This fee is determined by the specific franchise agreement executed under the Development Agreement.
In addition to the standard transfer fee, a sum of $5,000.00 is required for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This total amount, encompassing both the transfer fees and the undeveloped franchise rights fee, must be paid in a lump sum to FSI.
This lump sum payment is a precondition that must be met to obtain FSI's written consent for the proposed transfer. Therefore, the payment must be made before the transfer can be approved and finalized.