During the term of the agreement, who must own and control the Fat Shack Restaurant authorized under the agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchisee must own and control the Fat Shack Restaurant throughout the entire term of the Franchise Agreement. Fat Shack may request proof of this ownership from the franchisee at any time. The franchisee must also ensure that the Statement of Ownership provided to Fat Shack is accurate and up-to-date. If there are any changes to the ownership information during the term of the agreement, the franchisee is required to promptly notify Fat Shack in writing and comply with the transfer provisions outlined in Article 17 of the agreement.
This requirement ensures that the franchisee maintains direct responsibility for the operation and performance of the Fat Shack Restaurant. It prevents the franchisee from relinquishing control to another party without the franchisor's knowledge and consent. This is a standard provision in franchise agreements, as franchisors want to ensure that the individuals operating the business are committed to upholding the brand's standards and have a vested interest in its success.
For a prospective Fat Shack franchisee, this means that you must be prepared to actively manage and control the restaurant throughout the term of the agreement, which is seven years. You cannot simply delegate ownership or operational control to a third party without following the proper procedures for transfer and obtaining Fat Shack's approval. Failure to comply with these requirements could result in a breach of the Franchise Agreement.