Under what circumstances is a Fat Shack franchisee prohibited from extending the time to sign a lease?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Schedule
Franchisee shall execute a lease or otherwise acquire an approved location no later than 270 days from the date this Agreement is signed. FSI will extend the deadline required for Franchisee to acquire its site for up to three successive 90-day periods if (i) factors beyond Franchisee's reasonable control prevent Franchisee from meeting the applicable deadline, (ii) Franchisee has made reasonable and continuing efforts to obtain and submit for approval an acceptable site and lease, (iii) Franchisee delivers a written request to extend the time to sign a lease ("Extension Notice") at least five days prior to the applicable deadline, and (iv) for any extensions past the first 90-day extension, at the time Franchisee delivers the Extension Notice to FSI, Franchisee pays FSI a $500.00 "Site Acquisition Extension Fee" for each additional 90-day extension period. Franchisee shall not have any right to extend the time that Franchisee has to sign a lease under this Agreement if Franchisee is otherwise in default of this Agreement or any other agreement with FSI or if Franchisee has not timely exercised its previous rights to extend the lease execution deadlines set out herein. Under no circumstance, shall FSI allow Franchisee more than a total of 1½ years, including all site acquisition extensions, to locate and acquire the Restaurant Location, either through lease execution or otherwise. Any lease for the Restaurant Location shall, at FSI's option, be collaterally assigned to FSI as security for performance of Franchisee's obligations hereunder. Franchisee shall deliver a copy of the signed lease or other acquisition document for the Restaurant Location to FSI within five days of execution
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 right to extend the time to sign a lease is contingent upon certain conditions. Generally, a Fat Shack franchisee must execute a lease or acquire an approved location within 270 days of signing the Franchise Agreement. Fat Shack, Inc. (FSI) may grant up to three successive 90-day extensions if factors beyond the franchisee's control prevent meeting the deadline, the franchisee has made reasonable efforts to secure a site and lease, and the franchisee submits a written Extension Notice at least five days before the deadline. For extensions beyond the first 90-day period, the franchisee must also pay FSI a $500 Site Acquisition Extension Fee for each additional 90-day extension period.
However, the 2025 FDD stipulates that a Fat Shack franchisee loses the right to extend the lease signing deadline if they are in default of the Franchise Agreement or any other agreement with FSI. This means any breach of contract, such as failure to pay royalties or adhere to operational standards, could disqualify the franchisee from receiving an extension.
Additionally, a franchisee cannot extend the deadline if they have not timely exercised their previous rights to extend the lease execution deadlines. This suggests that if a franchisee fails to request an extension within the prescribed timeframe or misses a required payment for an extension, they forfeit their ability to seek further extensions. Fat Shack limits the total time for site acquisition, including all extensions, to 1½ years. Therefore, franchisees need to proactively manage their site acquisition process and maintain compliance with all agreements to retain their extension rights.