Can Fat Shack waive the obligation for franchisees to meet the development schedule under the Fat Shack Development Agreement?

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack has the right to waive a franchisee's obligation to meet the development schedule outlined in the Development Agreement. This waiver is at Fat Shack's sole discretion and is decided on a case-by-case basis.

For a prospective Fat Shack franchisee, this means that while a development schedule is typically enforced, there is a possibility that Fat Shack may grant a waiver if a franchisee is unable to meet the agreed-upon deadlines. However, it's important to note that Fat Shack's decision to grant a waiver to one franchisee does not set a precedent or guarantee that other franchisees, including you, will receive the same consideration. Your obligation to adhere to your development schedule remains in effect regardless of waivers granted to others.

This clause provides Fat Shack with flexibility in managing its franchise network. It allows them to consider individual circumstances and potentially avoid terminating agreements with franchisees who may be facing temporary challenges. However, it also introduces an element of uncertainty for franchisees, as there is no guarantee that a waiver will be granted even in extenuating circumstances.

Franchisees should not rely on the possibility of a waiver when making their initial investment and business plans. Instead, they should focus on creating a realistic development schedule and ensuring they have the resources and capabilities to meet it. If unforeseen circumstances arise, franchisees can request a waiver from Fat Shack, but they should be prepared to provide a strong justification for their request.

It is fairly common in franchising for franchisors to retain some discretion over enforcement of development schedules, as business conditions and franchisee capabilities can vary significantly. However, franchisees should carefully evaluate the franchisor's track record and reputation for fairness when considering such provisions.