Under what circumstances is the abandonment of a Fat Shack Restaurant excused?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Fat Shack's 2025 Franchise Disclosure Document, a franchisee's abandonment of the restaurant is excused if the full operation of the Fat Shack restaurant is suspended or terminated due to specific causes beyond the franchisee's control. These causes include fire, flood, earthquake, or other similar events.
However, this excuse is conditional. The suspension or termination must not be related to the availability of funds to the franchisee. This means that if a Fat Shack restaurant closes due to lack of funds, even if triggered by an event like a flood, the abandonment would not be excused under the terms of the franchise agreement.
This clause protects Fat Shack from franchisees who might try to claim force majeure due to financial difficulties indirectly caused by a disaster. It ensures that franchisees are still expected to maintain financial responsibility and operational readiness, even in challenging circumstances. Prospective franchisees should carefully consider their financial planning and insurance coverage to mitigate risks associated with potential disasters and ensure they can continue operations, as Fat Shack does not excuse abandonment due to financial constraints.