Under the Fat Shack Development Agreement, what agreement is required for each Fat Shack Restaurant to be developed?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Development Agreement, you will be required to enter into a separate franchise agreement for each of the FAT SHACK Restaurants to be developed by the deadlines designated in a development schedule specified in the Development Agreement. You must also maintain and continue to operate a certain number of FAT SHACK Restaurants in the Protected Area in accordance with the development schedule. If you fail to meet the development schedule, then we may terminate your Development Agreement. The termination of your Development Agreement solely for a failure to meet the development schedule will not terminate or affect your rights or obligations under any franchise agreements entered into between you and us prior to the date of termination of the Development Agreement.
We have the right, in our sole discretion and on a case-by-case basis, to waive the obligation of you or any other franchisees to meet the development schedule. A waiver by us of this obligation for one or more other franchisees does not in any way affect your obligation to meet your development schedule.
Source: Item 12 — Territory (FDD pages 36–39)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee enters into a Development Agreement, they are required to enter into a separate franchise agreement for each Fat Shack Restaurant to be developed. These franchise agreements must be executed by the deadlines outlined in the development schedule, which is specified in the Development Agreement. The franchisee must also maintain and continue to operate a certain number of Fat Shack Restaurants within the Protected Area, adhering to the development schedule. Failure to meet the development schedule can result in the termination of the Development Agreement. However, the termination of the Development Agreement for this reason will not affect any existing franchise agreements already in place between the franchisee and Fat Shack.
It's important to note that Fat Shack retains the right to waive the obligation to meet the development schedule on a case-by-case basis. However, a waiver granted to other franchisees does not impact the franchisee's own obligation to adhere to their development schedule. This means that even if other franchisees are given leeway, the franchisee is still responsible for meeting their own deadlines.
This requirement ensures that Fat Shack can maintain its growth trajectory and that franchisees are committed to developing their territories as agreed upon. For a prospective franchisee, this means carefully reviewing the development schedule and ensuring they have the resources and capabilities to meet the specified deadlines. Failing to do so could result in the loss of development rights, although existing franchise agreements would remain in effect.