When transferring a Fat Shack franchise, what fees must be paid for the transfer to be approved?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or Other Agreement | Summary | |
|---|---|---|---|
| m. | Conditions for our approval of transfer | Section 17.2 of FA; Sections 5.3 and 5.4 of DA | For the Franchise Agreement, the following conditions will apply: Full compliance, transferee qualifies, all amounts due are paid in full, all reports submitted, you have not breached any obligation during 60 day period before you requested our consent to transfer or during period between your request and the effective date of the transfer, transferee signs our then current form of franchise agreement (which may differ materially), transferee and its owners and affiliates do not operate or have ownership interest in competitive business, lease transferred, subordination of amounts due to you and your owners from transferee, completion of training, transfer fee paid, on-site assistance fee paid (if applicable), and sign and deliver other required documents (including release). For the Development Agreement, the following conditions will apply in addition to those listed above: Fee for each undeveloped FAT SHACK Restaurant paid, and concurrent transfer of underlying Franchise Agreements. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–46)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, several conditions must be met to gain approval for a franchise transfer. These conditions include paying a transfer fee and an on-site assistance fee (if applicable).
Beyond the fees, the transferring franchisee must be in full compliance with the Franchise Agreement, have paid all amounts due, and have submitted all required reports. They also must not have breached any obligation within 60 days before requesting consent to transfer or during the period between the request and the transfer's effective date.
The prospective new franchisee (transferee) must also meet certain requirements. The transferee must qualify as a franchisee, sign the then-current form of the franchise agreement (which may differ materially from the original), and ensure that neither they nor their owners/affiliates operate or have an ownership interest in a competitive business. The lease must be transferred, and any amounts owed to the seller by the buyer must be subordinated to Fat Shack. The transferee must also complete training and sign/deliver all other required documents, including a release. If the Development Agreement is also being transferred, a fee for each undeveloped Fat Shack Restaurant must be paid, and the underlying Franchise Agreements must be transferred concurrently.