Under the Development Agreement, what is the Development Fee for each additional Fat Shack Restaurant to be developed?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Development Agreement, you must pay us the Initial Franchise Fee noted above for your first FAT SHACK Restaurant franchise plus a $5,000 fee ("Development Fee") multiplied by the number of additional FAT SHACK Restaurants to be developed. We will credit the Development Fee attributable to the each subsequent FAT SHACK Restaurant to be developed under the Development Agreement to the Initial Franchise Fee due under the Franchise Agreement for such FAT SHACK Restaurant. The total Initial Franchise Fee payable for each of the second and subsequent FAT SHACK Restaurants is $18,000 per franchise. The balance of the Initial Franchise Fee for each FAT SHACK Restaurant you open is due upon your execution of the Franchise Agreement for that FAT SHACK Restaurant. Under the Development Agreement, you must agree to open at least two additional FAT SHACK Restaurants in addition to your first FAT SHACK Restaurant.
Source: Item 5 — Initial Fees (FDD pages 13–15)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, if a franchisee enters into a Development Agreement, they must pay a $5,000 Development Fee for each additional Fat Shack restaurant they plan to develop, in addition to the initial franchise fee for the first restaurant. This Development Fee is multiplied by the number of additional Fat Shack Restaurants to be developed.
The Development Fee is credited towards the Initial Franchise Fee due for each subsequent Fat Shack Restaurant developed under the agreement. The total Initial Franchise Fee for the second and subsequent restaurants is $18,000 per franchise. The remaining balance of the Initial Franchise Fee for each Fat Shack Restaurant is due upon execution of the Franchise Agreement for that restaurant.
The Development Agreement mandates that the franchisee agrees to open at least two additional Fat Shack Restaurants in addition to their first Fat Shack Restaurant. This structure incentivizes multi-unit development while providing some financial relief by crediting the initial Development Fee towards the franchise fees of subsequent locations.