Under what conditions is Fat Shack willing to grant a franchisee the right to operate a Fat Shack Restaurant?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
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FSI grants to Franchisee, and Franchisee accepts from FSI, the right to use the Marks and Licensed Methods in connection with the establishment and operation of a FAT SHACK Restaurant, at the location described in Section 3.1. Franchisee agrees to use the Marks and Licensed Methods, as they may be changed, improved, and further developed by FSI from time to time, only in accordance with the terms and conditions of this Agreement.
2.2. Scope of Franchise Operations
Franchisee agrees at all times to faithfully, honestly and diligently perform Franchisee's obligations hereunder, to use best efforts to promote its FAT SHACK Restaurant and to not engage in any other business or activity that conflicts with the operation of the FAT SHACK Restaurant in compliance with this Agreement. Franchisee agrees to utilize the Marks and Licensed Methods to operate all aspects of Franchisee's FAT SHACK Restaurant in accordance with the methods and systems developed and prescribed from time to time by FSI, all of which are a part of the Licensed Methods. Franchisee's FAT SHACK Restaurant shall offer all products and services designated by FSI. Franchisee shall implement any additions and changes to the products and services offered by its FAT SHACK Restaurant that FSI requires.
3. RESTAURANT LOCATION AND TARGET AREA
3.1. Restaurant Location
Franchisee is granted the right to own and operate one FAT SHACK Restaurant at the address and location ("Restaurant Location") set forth in the Addendum to Franchise Agreement attached hereto as Exhibit I (the "Addendum"). If a specific address has not been chosen as of the date this Agreement is signed, then Franchisee shall choose and acquire a location for its FAT SHACK Restaurant within the nonexclusive Target Area set forth in the Addendum. Franchisee shall select and propose to FSI for approval a specific site for the Restaurant Location within the Target Area, which FSI shall have the right to approve or disapprove in accordance with the terms set forth in this Agreement. If the Addendum lists only a Target Area and not the Restaurant Location, then the Restaurant Location Supplement to Franchise Agreement attached hereto as Exhibit II will be executed by FSI and Franchisee upon FSI's later approval of the Restaurant Location. Franchisee acknowledges and agrees that the Restaurant Location will be a specific numbered street or mall address at which Franchisee's FAT SHACK Restaurant will be physically located. The Restaurant Location cannot and will not under any circumstances be defined as a geographic area or be described in terms other than a specific numbered street or mall address. During and after the term of this Agreement, neither Franchisee nor Franchisee's successors and assigns shall use the Restaurant Location for any purpose other than operating a FAT SHACK Restaurant.
3.2. Protected Territory
Subject to Section 3.4 and Section 3.5 of this Agreement regarding Special Venues and Channels and Captive Audience Venues, Franchisee is granted a geographic area around the Restaurant Location (the "Protected Territory") in which FSI will not operate, nor permit a third party to operate, a FAT SHACK Restaurant as long as Franchisee is in substantial compliance with all the provisions of this Agreement. The Protected Territory is an area encompassing a three mile radius around the Restaurant Location as measured from the front door of the Restaurant. A FAT SHACK Restaurant at a Captive Audience Venue does not have a Protected Territory. Because there are exceptions where FSI, its affiliates or other third parties may operate a FAT SHACK Restaurant in Franchisee's Protected Territory, Franchisee's Protected Territory is not considered an exclusive territory.
3.3.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, Fat Shack grants a franchisee the right to use its marks and licensed methods to establish and operate a Fat Shack Restaurant at a specific location. The franchisee must agree to use the marks and licensed methods in accordance with the terms and conditions of the Franchise Agreement, as Fat Shack may change or improve them over time. The specific location of the restaurant is detailed in an addendum to the Franchise Agreement.
To maintain the franchise rights, the franchisee must diligently perform their obligations under the agreement and use their best efforts to promote the Fat Shack Restaurant. They must not engage in any other business activities that conflict with the operation of the Fat Shack Restaurant and must operate all aspects of the restaurant according to Fat Shack's methods and systems. The franchisee is required to offer all products and services designated by Fat Shack and implement any additions or changes to these offerings as required by Fat Shack.
Fat Shack also grants franchisees development rights to establish multiple Fat Shack Restaurants within a protected geographic area, as detailed in an addendum. Each restaurant established under these development rights requires a separate Franchise Agreement. Fat Shack will not establish or license others to establish Fat Shack Restaurants within the franchisee's protected area, although existing franchise agreements may remain in effect and Fat Shack may renew or enter into successor agreements for these existing locations. However, these development rights are nonexclusive, and Fat Shack reserves the right to market and sell products and services through other venues and channels, such as grocery stores or catering services, and in captive audience venues.