Under what conditions will FSI execute a Franchise Agreement with a Fat Shack franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
h on the Development Schedule.
- 3.2. Franchisee will exercise its right for development of each FAT SHACK Restaurant by giving FSI written notice of its intention to develop such FAT SHACK Restaurant at least 90 days in advance of the deadline set forth in the Development Schedule for executing each Subsequent Franchise Agreement. Subject to FSI's approval, Franchisee must execute the then-current form of Franchise Agreement for the particular FAT SHACK Restaurant and pay the balance of the Initial Franchise Fee, together with all other initial fees and deposits set forth in the applicable Subsequent Franchise Agreement by the deadline set forth in the Development Schedule. FSI will execute a Franchise Agreement with Franchisee only if Franchisee is in compliance with all requirements and obligations of this Development Agreement and all other agreements between the parties, including the individual Franchise Agreements between FSI and Franchisee. Franchisee acknowledges and agrees that FSI will have the right to refuse to offer Franchisee the right to enter into a Subsequent Franchise Agreement if FSI believes, in its discretion, that Franchisee does not have sufficient financial resources or other ability to properly develop and operate the proposed subsequent FAT SHACK Restaurant. The Subsequent
Franchise Agreement for the second and each subsequent FAT SHACK Restaurant will be executed within 10 days after FSI's approval of the particular FAT SHACK Restaurant location. Franchisee's failure to execute any Subsequent Franchise Agreement or its default in any term of any Subsequent Franchise Agreement may, at the option of FSI, be deemed a default under this Development Agreement and shall entitle FSI to terminate this Development Agreement as further provided in Article 4 below.
- 3.3.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, FSI (Fat Shack Inc.) will execute a Franchise Agreement with a franchisee if the franchisee is in compliance with all requirements and obligations of the Development Agreement and all other agreements between the parties, including the individual Franchise Agreements between FSI and the franchisee. This means the franchisee must adhere to the schedules and terms outlined in those agreements.
Fat Shack also retains the right to refuse a Subsequent Franchise Agreement if it believes the franchisee lacks sufficient financial resources or the ability to properly develop and operate the subsequent Fat Shack Restaurant. The Subsequent Franchise Agreement for the second and each subsequent Fat Shack Restaurant will be executed within 10 days after FSI's approval of the particular Fat Shack Restaurant location.
Furthermore, the franchisee must provide written notice of their intention to develop a restaurant at least 90 days before the deadline set in the Development Schedule for executing each Subsequent Franchise Agreement. The franchisee must also execute the then-current form of the Franchise Agreement and pay the balance of the Initial Franchise Fee, along with all other initial fees and deposits, by the specified deadline. Failure to meet these conditions or defaulting on any term of any Subsequent Franchise Agreement may result in termination of the Development Agreement at Fat Shack's discretion.