Upon termination of the Fat Shack franchise agreement, what payments must be made to FSI or its affiliates?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
ion or Expiration
Franchisee is obligated upon termination or expiration of this Agreement to immediately do all of the following:
- a. Pay all Royalties, Marketing and Promotion Fees, Noncompliance Service Charges, and other amounts then owed FSI or any of its affiliates pursuant to this Agreement, or otherwise.
- b. Cease to identify itself as a FAT SHACK franchisee or use any Marks, trade secrets, signs, symbols, devices, trade names, or other materials of FSI.
- c.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee is obligated to immediately pay all outstanding Royalties, Marketing and Promotion Fees, Noncompliance Service Charges, and any other amounts owed to FSI or its affiliates. This encompasses all financial obligations accrued during the term of the agreement.
This requirement ensures that Fat Shack franchisees fulfill all financial responsibilities to the franchisor before ceasing operations. It is a standard practice in franchising to require payment of outstanding fees upon termination to protect the franchisor's financial interests.
Additionally, the franchisee must also pay all third parties all amounts then owed to them for products or services directly or indirectly related to the Fat Shack Restaurant.