Under the Fat Shack agreement, is there an exception to the full release?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. This Agreement may only be modified upon execution of a written agreement between FSI and Franchisee or, at FSI's option, upon notice of the approval of a Super-Majority as defined in Section 24.1.b below. Unless prohibited by law or waived by FSI, Franchisee must provide a general release of any and all claims against FSI if Franchisee requests and FSI consents to modify any provisions of this Agreement after it has been signed.
- b. This Agreement may be modified by FSI at its option whenever FSI and a Super-Majority, as hereinafter defined, of franchisees of FSI agree to the modification. A "Super-Majority" of FSI franchisees shall consist of the owners of at least 75 percent of all FAT SHACK Restaurants, or, if only a portion of FAT SHACK Restaurants are affected by the modification, at least 75 percent of those FAT SHACK Restaurants affected by the modification. Whenever a modification is approved by a Super-Majority, FSI may elect to treat the modification as effective to all franchisees or the applicable group thereof, including Franchisee, to the same extent and in the same manner as if the modification was unanimously approved by all applicable Franchisees, and regardless of whether Franchisee may or may not desire to be
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee must generally provide a release of all claims against Fat Shack if the franchisee requests and Fat Shack consents to modify any provisions of the franchise agreement after it has been signed. This means that if a franchisee wants to change something in their agreement after signing, Fat Shack might agree, but only if the franchisee gives up their right to sue Fat Shack over anything related to the franchise.
This requirement for a release protects Fat Shack from potential legal claims that might arise from the modification itself or from past issues. It's a way for Fat Shack to ensure that by agreeing to a change, they're not opening themselves up to future lawsuits from the franchisee. This is a fairly common practice in franchising, as franchisors want to avoid disputes and maintain consistent standards across their franchise system.
However, Fat Shack also has the option to modify the agreement with a "Super-Majority" approval of franchisees (at least 75% of all Fat Shack Restaurants or 75% of those affected by the modification). In this case, Fat Shack can elect to make the modification effective for all franchisees, regardless of whether an individual franchisee desires to be bound by the modification. By signing the agreement, the franchisee appoints the officers of FSI as its attorneys in fact with irrevocable power and authority to execute any such modification so approved. This indicates that the requirement for a release may not apply when modifications are approved by a Super-Majority.