Are there any financial thresholds mentioned in the Fat Shack FDD receipt related to the guarantee?

According to the 2025 Fat Shack Franchise Disclosure Document, the receipt acknowledges that if any guarantee of the Franchise Agreement fails to be a continuing obligation fully enforceable against the guarantor, or there is any inadequacy of the guaranty or guarantor, and the guarantor is unable to provide adequate assurances as required by Fat Shack, it can be considered a default. This means that the financial stability and enforceability of the guarantee provided by the franchisee (or a third party) are critical.

If the guarantor's financial situation changes or the guarantee becomes unenforceable for any reason, Fat Shack may require the franchisee to provide additional assurances or take other corrective actions. Failure to do so could result in a default under the Franchise Agreement. This clause protects Fat Shack by ensuring that the financial commitments behind the franchise are solid and reliable throughout the term of the agreement.

Prospective franchisees should carefully review the guarantee requirements with their legal and financial advisors to ensure they fully understand the obligations and potential consequences. They should also be prepared to provide additional financial assurances if requested by Fat Shack to maintain the validity and enforceability of the guarantee.