What must any transfer of a Fat Shack Development Agreement include?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
A condition of FSI's approval of a transfer of this Development Agreement is that Franchisee must transfer all of its interest under this Development Agreement, and shall not be permitted to transfer any portion of this Development Agreement separate and apart from the remainder of this Development Agreement.
Any transfer shall include the rights to all Franchise Agreements entered into between FSI and Franchisee hereunder.
Franchisee and the transferee shall comply with the requirements under each Franchise Agreement entered into between FSI and Franchisee for the transfer of each such Franchise Agreement, including the payment of the applicable transfer fee for each Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a transfer of the Development Agreement requires the franchisee to transfer their entire interest in the agreement. This means the franchisee cannot transfer only a portion of the agreement.
Specifically, any transfer must include the rights to all Franchise Agreements that the franchisee has entered into with Fat Shack under the Development Agreement. The franchisee and the party to whom they are transferring the agreement must also meet all the requirements for transferring each individual Franchise Agreement, including paying the applicable transfer fee for each one.
In practical terms, a Fat Shack franchisee looking to sell their development rights must find a buyer willing to take over the entire agreement, including all existing franchise locations and the obligation to develop any remaining locations within the protected area. This could make it more difficult to find a buyer, as it requires a larger financial commitment and operational capacity than purchasing a single franchise.