Under what conditions can Fat Shack require payment by means other than automatic debit?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
ents
- Franchisee agrees that the Royalty, Marketing and Promotion Fee (defined in Section 13.3), Noncompliance Service Charge (defined in Section 12.4), gift card purchases and fees, product purchases, advertising, promotional and point-of-purchase materials, and other payments due to FSI or an affiliate of FSI shall be sent to FSI by electronic funds transfer, unless FSI agrees to another form of payment in its sole discretion. Upon the request of FSI and in no event later than 30 days prior to the opening of the FAT SHACK Restaurant, Franchisee shall execute an Authorization Agreement for preauthorized payment ("ACH Payment"), of any amounts due under this Agreement or otherwise by electronic transfer of funds from Franchisee's bank account to FSI's bank account, in the form attached to this Agreement as Exhibit III.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, payments for royalties, marketing and promotion fees, noncompliance service charges, gift card purchases and fees, product purchases, advertising, promotional and point-of-purchase materials, and other payments due to Fat Shack or its affiliates are typically made via electronic funds transfer. However, Fat Shack retains the discretion to agree to other forms of payment.
In the event a Fat Shack franchisee fails to make timely payments for products purchased from Fat Shack or its affiliates, or if the franchisee is delinquent on any other amounts owed to Fat Shack or its affiliates, Fat Shack may demand that future payments be made in cash on delivery (COD). If the franchisee does not pay on a COD basis, Fat Shack or its affiliates can discontinue selling products to the franchisee.
This policy ensures that Fat Shack can maintain consistent revenue streams and address payment issues promptly. It also protects Fat Shack from potential losses due to delinquent franchisee accounts, while providing a clear protocol for handling such situations. Franchisees should be aware of these conditions to avoid disruptions in their supply of products and to maintain a positive financial standing with the franchisor.