Under the Development Agreement, what is the minimum number of additional Fat Shack Restaurants a franchisee must agree to open?

According to Fat Shack's 2025 Franchise Disclosure Document, a franchisee entering into a Development Agreement must commit to opening a minimum of two additional Fat Shack restaurants beyond their initial location. This requirement is in addition to the first Fat Shack Restaurant. This commitment is formalized within the Development Agreement.

In practical terms, this means a prospective Fat Shack franchisee considering a Development Agreement needs to be prepared to invest in and operate at least three Fat Shack restaurants: the initial one plus the two additional locations mandated by the agreement. This has significant implications for the franchisee's capital requirements, operational responsibilities, and overall business strategy. The franchisee will need to secure funding for multiple locations and develop the infrastructure to manage them effectively.

This type of development agreement is common in franchising, as it allows franchisors like Fat Shack to expand rapidly while placing the responsibility for multi-unit development on motivated franchisees. However, it also represents a greater risk for the franchisee, who is committing to a larger investment and a more complex business operation from the outset. Prospective franchisees should carefully consider their financial capacity, operational expertise, and market knowledge before entering into a Development Agreement with Fat Shack.