Under what circumstances does Fat Shack limit franchise rights, as described in section 3.3?

According to the 2025 Fat Shack Franchise Disclosure Document, section 3.3 outlines specific limitations on a franchisee's rights. The franchise rights granted are strictly for the specific restaurant location detailed in the franchise agreement. This means the franchisee cannot simply transfer the rights to another location without obtaining prior written approval from Fat Shack. This restriction ensures that Fat Shack maintains control over where its brand is represented and that each location meets its standards.

If a franchisee wishes to move or relocate their Fat Shack restaurant during the term of the agreement, they must seek approval from Fat Shack for the proposed new location. This process involves submitting information about the new location for review, as per Section 6.1 of the agreement. Additionally, the franchisee is required to pay a "Relocation Fee" to Fat Shack. This fee is equivalent to 25% of the then-current initial franchise fee for a first Fat Shack restaurant.

These limitations are fairly standard in the franchise industry, as franchisors typically want to maintain control over brand consistency and location quality. The relocation fee compensates Fat Shack for the costs associated with evaluating and approving a new location, as well as any potential impact on the overall brand. Prospective franchisees should carefully consider these limitations and the associated costs before signing a franchise agreement, as relocating a Fat Shack restaurant can involve significant expenses and require franchisor approval.