Under what circumstances are the fees paid to Fat Shack refundable?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not offer financing for any portion of the initial fees or payments in this Item 5. Except as otherwise stated above for the Lease Review Fee, each of these initial fees and payments must be paid in full when you sign the applicable agreement. The Initial Franchise Fee represents, in its entirety, payment for our pre-opening and grand opening support, and we have fully earned the Initial Franchise Fee upon completion of our pre-opening and grand opening support obligations. We fully earn the Development Fee, the Lease Review Fee, and other payments when paid. No fees are refundable under any circumstances.
Source: Item 5 — Initial Fees (FDD pages 13–15)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchise fees are generally non-refundable. The FDD states explicitly that "No fees are refundable under any circumstances." This applies to the initial franchise fee, development fee, lease review fee, and other payments.
Specifically, the initial franchise fee is $35,000 for the first franchise agreement and $18,000 for each subsequent agreement. The development fee is $5,000 multiplied by the number of additional Fat Shack restaurants to be developed under a Development Agreement. The lease review fee is $750, charged for the review of the third and each subsequent lease or purchase agreement, though Fat Shack may waive this fee at its discretion.
This non-refundable policy is a standard practice in the franchise industry, as these fees are typically used to cover the franchisor's expenses in evaluating and setting up a new franchisee. Prospective franchisees should be aware of this policy and carefully consider their decision before signing any agreements or making any payments to Fat Shack.