Fat Shack
Fat Shack offers late-night specialty quick-service sandwich restaurants featuring 'Fat Sandwiches,' burgers, wings, and more. Known for late-night delivery, this franchise operates in the fast-casual dining industry.
About Fat Shack
Fat Shack is an American fast-casual restaurant chain founded in Fort Collins, Colorado. As of September 2025, it has 31 corporate and franchise-owned restaurants across fourteen states; the most recent opening was in Sioux Falls, South Dakota, marking their entry into the state.
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Fat Shack franchise FAQ
How much does it cost to open one — the total initial investment?
The initial investment for opening your first FAT SHACK Restaurant is described separately in Chart A of this Item 7. This isn't specified in the provided excerpts.
What is the initial franchise fee?
The initial franchise fee varies based on the number of FAT SHACK Restaurants you operate. For the first restaurant, it is $35,000 [p.13]. For each subsequent restaurant, the fee is $18,000 [p.13]. Additionally, there is a Development Fee of $5,000 for each additional restaurant under a Development Agreement [p.61, p.128]. This isn't specified in the excerpts for a single initial franchise without considering development rights.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 6% of the total Gross Sales generated by the FAT SHACK Restaurant [p.61]. For advertising, franchisees may be required to pay a Marketing and Promotion Fee up to 1½ percent of their weekly Gross Sales, which FSI can change with 30 days' notice but not above this maximum during the agreement term [p.77].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in the provided excerpts. However, regarding renewal, the FDD indicates that the franchisor may refuse to renew a franchise without fairly compensating the franchisee for the fair market value at the time of expiration of certain items like inventory and equipment [p.6]. This subsection applies only if the term of the franchise is less than five years and certain conditions are met. The exact length of the initial franchise agreement and explicit renewal terms are not detailed in these excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot freely sell or transfer your ownership of the franchise without the franchisor's permission, except for good cause. Good cause includes but is not limited to specific reasons determined by the franchisor [p.6].
On what grounds can the franchisor terminate the agreement?
This isn't specified in the excerpts. The provided pages only detail grounds for termination by the franchisee and do not specify grounds for termination by the franchisor.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD does not detail specific financial requirements such as net worth or liquid capital needed to qualify for the franchise. However, it does mention that if the franchisor's most recent unaudited financial statements show a net worth of less than $100,000, they may require escrow of funds until obligations are fulfilled [p.7].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory. However, you are granted a Protected Territory around your Restaurant Location, which is a three-mile radius where FSI will not operate another FAT SHACK Restaurant as long as you comply substantially with the Agreement [p.60]. This Protected Territory does not guarantee exclusivity due to potential exceptions and other competitive outlets [p.197, p.38].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training at designated facilities, supervised by experienced staff including Tom Armenti and Kevin Gabauer. Up to three individuals can attend this training without charge, but Franchisee is responsible for travel and living expenses. Ongoing support includes making the training program available for replacement or additional General Managers during the term of the agreement, though there may be fees associated with such training [p.29, p.67, p.69].
How many franchised outlets are there, and how many have closed or been terminated?
At the end of calendar year 2024, there were 24 franchisee-owned Units, but one outlet was closed for a significant part of the year and another operated by an affiliate before being transferred to a franchisee. Additionally, one franchised Unit closed during the year. The exact number of outlets that have been terminated or closed is not specified in the provided excerpts; however, information about specific terminations or closures can be found on page [p.171].
Does the franchisor share any financial performance or earnings information?
The franchisor can provide actual records of existing outlets if requested by a prospective franchisee [p.48]. However, the franchisor does not make any financial performance representations other than providing actual records for an existing outlet being considered [p.46]. The franchisor also reserves the right to disclose data derived from financial and accounting reports received from the franchisee [p.83].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only those products and services approved by the franchisor [p.42]. You must purchase all necessary supplies, equipment, and products from suppliers approved in advance by the franchisor [p.25, p.70], including an initial starting package of supplies and materials for your FAT SHACK Restaurant [p.70].