Under what conditions can FSI suspend services to a Fat Shack franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
If FSI has provided Franchisee with a notice of any default pursuant to this Article 19, in addition to FSI's other remedies, FSI reserves the right, on behalf of itself and the FSI Affiliates, to suspend any services to be provided by FSI or any FSI Affiliate or the sales of any products to Franchisee by FSI or any FSI Affiliate until such time as Franchisee cures the default. The services that may be suspended include but are not limited to any services related to advertising or promotion of Franchisee's FAT SHACK Restaurant such as the listing of Franchisee's FAT SHACK Restaurant on any website. The suspension may continue until Franchisee has cured each default identified in the default notice from FSI and Franchisee is deemed to be in good standing. Franchisee is not relieved of any obligation to pay any fees during the term of any suspension. The rights afforded FSI in this Section 19.7 are in addition to any other rights of FSI upon a default by Franchisee.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, FSI (presumably Fat Shack International) has the right to suspend services to a franchisee if the franchisee is in default. Before suspending services, FSI must provide the franchisee with a notice of default.
The services that FSI may suspend include any services related to advertising or promotion of the Fat Shack restaurant, such as listing the restaurant on any website. This suspension can continue until the franchisee has corrected each default mentioned in the default notice and is considered in good standing by FSI.
It's important to note that even if services are suspended, the franchisee is still obligated to pay all fees during the suspension period. This right to suspend services is in addition to any other rights FSI has if the franchisee defaults. This means Fat Shack can pursue other remedies outlined in the franchise agreement, even while services are suspended.
This clause highlights the importance of adhering to the franchise agreement and rectifying any defaults promptly to avoid service disruptions that could impact the Fat Shack location's operations and marketing efforts. Franchisees should carefully review the default provisions in their agreement to understand what actions could trigger a default notice and subsequent suspension of services.