What is the transfer fee for a Fat Shack franchise, and when is it due?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
orporated herein by reference.
- 5.3. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee and/or the proposed transferee shall pay to FSI the standard transfer fee for each franchise agreement to be transferred, as governed by such franchise agreement executed pursuant to this Development Agreement, plus $5,000.00 for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This sum shall be payable in lump sum to FSI as one of the preconditions to obtaining FSI's written consent to any proposed transfer. In the event of transfer, the transferee shall pay the remaining portions of the Initial Franchise Fees owed to FSI, when each Subsequent Franchise Agreement is signed. Transfer fees paid to FSI will not be applied to the Initial Franchise Fees due, but the transferee will receive credit for Franchisee's earlier payment of the Development Fees.
- 5.4. 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.
- 5.5.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, in the event of a transfer, the franchisee and/or the proposed transferee must pay Fat Shack the standard transfer fee for each franchise agreement being transferred. This fee is determined by the franchise agreement executed under the Development Agreement. Additionally, a fee of $5,000 is required for every undeveloped franchise right for which no Subsequent Franchise Agreement has been executed. This total sum is payable in a lump sum to Fat Shack as a precondition to obtaining their written consent for the transfer.
In cases where the Development Agreement is transferred, the franchisee must transfer all interests under the agreement. This transfer includes rights to all Franchise Agreements entered into between Fat Shack and the franchisee. The franchisee and transferee must comply with the requirements for transferring each Franchise Agreement, including paying the applicable transfer fee for each agreement.
It is important to note that transfer fees paid to Fat Shack will not be applied to the Initial Franchise Fees due. However, the transferee will receive credit for the franchisee's earlier payment of the Development Fees. There is an exception to the transfer fee in the event of a transfer made due to death or permanent disability, where no transfer fee will be charged, though Fat Shack reserves the right to charge tuition for any training necessitated by the transfer.