Under what circumstances will Fat Shack waive the transfer fee in the event of a transfer of ownership?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of a transfer made pursuant to this Section 17.6, there shall be no transfer fee charged by FSI; provided that FSI reserves the right to charge tuition for any training necessitated by the transfer. Failure to transfer the interest within said period of time shall constitute a breach of this Agreement. The term "permanent disability" shall mean a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee (or an owner controlling a Franchisee entity) from supervising the management and operation of the FAT SHACK Restaurant for a period of 120 days from the onset of such disability, impairment or condition. In any event, the FAT SHACK Restaurant shall at all times be managed by a General Manager who has complied with all of FSI's training requirements, regardless of any death or permanent disability covered by this Section 17.6.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the transfer fee is waived only in the event of a transfer made due to the death or permanent disability of the franchisee. The FDD defines "permanent disability" as a mental or physical condition that prevents the franchisee (or an owner controlling the franchisee entity) from managing the Fat Shack restaurant for at least 120 days.
Even in the event of death or permanent disability, Fat Shack reserves the right to charge tuition for any training necessitated by the transfer. The transfer must occur within a reasonable time, not exceeding 120 days from the date of death or permanent disability, unless probate proceedings extend this period. Failure to transfer the interest within this timeframe constitutes a breach of the Franchise Agreement.
Regardless of death or disability, the Fat Shack restaurant must always be managed by a General Manager who has completed all of Fat Shack's training requirements. This ensures the restaurant continues to meet Fat Shack's operational standards even during a transfer due to unforeseen circumstances. This condition highlights the importance Fat Shack places on maintaining consistent management and trained personnel at all locations, even during ownership transitions.
It is important to note that this is the only circumstance described in the provided FDD excerpt where Fat Shack explicitly waives the transfer fee. In all other cases of transfer, the standard transfer fee will apply, as governed by the franchise agreement.