Under what conditions can a Fat Shack franchisee terminate the Franchise Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or | Summary | |
|---|---|---|---|
| d. Termination by you | Section 19.1 of FA; Section 4.2 of DA | For the Franchise Agreement: On written notice if you notify us within 30 days of the breach and we materially fail to comply and fail to cure within 60 days after notice or such additional time reasonably needed to cure (subject to applicable state law). For the Development Agreement: On 60 days’ written notice by you for any reason (subject to applicable state law). |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–46)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee can terminate the Franchise Agreement under specific conditions related to a breach of contract by the franchisor. The franchisee must provide written notice to Fat Shack within 30 days of the breach occurring. Following this notification, Fat Shack has a 60-day period to address and resolve the issue.
However, the franchisee can only terminate the agreement if Fat Shack materially fails to comply with the terms of the agreement and does not cure the breach within the specified 60-day period (or any additional reasonable time needed to cure the breach). This right to terminate is also subject to applicable state laws, which may provide additional protections or requirements for franchisees.
It is important for prospective Fat Shack franchisees to understand the specific definition of 'material breach' as defined in the Franchise Agreement, as this will determine the grounds for termination. Additionally, franchisees should be aware of any state laws that may affect their termination rights, as these laws can supersede the terms outlined in the Franchise Agreement. Consulting with a franchise attorney is advisable to fully understand these rights and obligations.