What is the timeframe that Fat Shack's audit can cover?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
FSI may audit and inspect documents covering a period beginning with the date on which Franchisee first acquired its FAT SHACK Restaurant and ending on the date such audit is concluded.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack Inc. (FSI) has the right to audit a franchisee's records. This audit can cover the period starting from the date the franchisee first acquired their Fat Shack restaurant and ending on the date the audit concludes.
This means Fat Shack can look back at all financial records from the beginning of the franchise agreement. Franchisees must maintain these records for at least five years after the fiscal year to which they relate. These records are essential for verifying that all fees owed to FSI have been accurately paid.
If an audit reveals that the franchisee has understated gross sales by 2% or more, the franchisee is responsible for covering all reasonable costs and expenses associated with the audit. This includes fees for independent accountants, as well as travel, living expenses, and compensation for Fat Shack's employees or agents involved in the audit.