Under what conditions can Fat Shack terminate the Franchise Agreement with cause?

According to the 2025 Fat Shack Franchise Disclosure Document, Fat Shack can only terminate the Franchise Agreement with cause if the franchisee commits one of several listed violations. The FDD does not specify what these violations are, but directs the prospective franchisee to Sections 19.2, 19.3, 19.4, and 19.5 of the Franchise Agreement for further details.

It is important for a prospective Fat Shack franchisee to carefully review these sections within the Franchise Agreement to understand what actions or failures could lead to termination. Understanding these conditions is crucial for maintaining a successful and long-term franchise relationship. Franchise agreements typically include a range of violations that can lead to termination, such as failure to meet performance standards, non-compliance with brand standards, or failure to pay royalties.

Prospective franchisees should also be aware that certain state laws may supersede the Franchise Agreement regarding termination. Attachment L to the Franchise Disclosure Document contains State Addenda that address such state-specific regulations. Therefore, it is essential to consult with a franchise attorney to understand how local laws might affect the termination provisions outlined in the Franchise Agreement.

In summary, while Fat Shack can terminate the Franchise Agreement with cause, the specific conditions constituting cause are detailed in the Franchise Agreement itself. A thorough review of these sections, along with any applicable state laws, is a critical step in the due diligence process for any potential Fat Shack franchisee.