Under what circumstances is the abandonment clause waived for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- e. Abandonment.
If Franchisee ceases to operate the FAT SHACK Restaurant or otherwise abandons the FAT SHACK Restaurant for a period of five consecutive days, or any shorter period that indicates an intent by Franchisee to discontinue operation of the FAT SHACK Restaurant, unless and only to the extent that full operation of the FAT SHACK Restaurant is suspended or terminated due to fire, flood, earthquake or other similar causes beyond Franchisee's control and not related to the availability of funds to Franchisee.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, the abandonment clause is waived if the full operation of the Fat Shack restaurant is suspended or terminated due to specific causes beyond the franchisee's control. These causes are explicitly limited to fire, flood, earthquake, or other similar events.
Critically, the waiver is conditional. The cause of the suspension or termination must be similar to a fire, flood, or earthquake. Furthermore, the cause must be beyond the franchisee's control.
Most importantly, the abandonment clause is explicitly NOT waived if the suspension or termination is related to the availability of funds to the franchisee. This means that financial difficulties, even if severe, do not excuse the franchisee from the abandonment clause. This is a significant risk for prospective franchisees, as it means they could lose their franchise if they are forced to close temporarily due to lack of funds, even if they intend to reopen.