Can the terms of Subsequent Franchise Agreements for Fat Shack Restaurants differ from the terms of the Initial Franchise Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.4. Each Subsequent Franchise Agreement to be executed by Franchisee for each FAT SHACK Restaurant to be developed hereunder shall be in the form of Franchise Agreement then generally being offered to franchisees by FSI, which may contain terms subsequently different then the terms of the Initial Franchise Agreement. Notwithstanding the foregoing, FSI agrees that it will not charge an Initial Franchise Fee to Franchisee which is greater than the amounts set forth in Section 2.1. above. Franchisee acknowledges that FSI has the right, however, to charge then current published rates for the required products, royalty percentages, advertising contributions and other fees, products and services offered to Franchisee.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the terms of Subsequent Franchise Agreements can differ from the Initial Franchise Agreement. Specifically, each Subsequent Franchise Agreement will be in the form of the Franchise Agreement then generally being offered by Fat Shack to franchisees, which may contain terms that differ from the Initial Franchise Agreement.
However, Fat Shack agrees that it will not charge an Initial Franchise Fee that is greater than the amount set forth in Section 2.1 of the Development Agreement for subsequent agreements. The franchisee acknowledges that Fat Shack has the right to charge then-current published rates for required products, royalty percentages, advertising contributions, and other fees, products, and services.
This means that while the initial franchise fee is capped, other costs associated with operating a Fat Shack franchise could fluctuate over time, potentially impacting profitability. Prospective franchisees should carefully review the then-current Franchise Agreement offered for each subsequent location to understand any changes in obligations or fees.