Risk Score
Pending analysis
Investment Range
$183,250 - $487,600
Franchise Fee
$18,000
Total US Locations
29
Business Summary
Fat Shack Inc. franchises specialty quick service sandwich restaurants under the name Fat Shack®. These restaurants offer 'Fat Sandwiches,' burgers, and wings, along with appetizers, desserts, and hot and cold beverages. Fat Shack® Restaurants provide options for dine-in, takeout, and delivery, and they particularly focus on late-night delivery services for their customers.
Corporate History
Fat Shack Inc. was originally formed as Fat Shack America, LLC, a Delaware limited liability company, on February 20, 2013. In March 2019, the company converted to a Delaware corporation and changed its name to Fat Shack Inc. Its principals, Thomas J. Armenti and Kevin J. Gabauer, have extensive experience in the quick service restaurant business, having operated similar businesses since 2010. Fat Shack Inc. began offering franchises for Fat Shack® Restaurants in February 2015. While there is one licensed retail outlet in New Jersey serving Fat Shack products, it operates under a different model than the franchised Fat Shack® Restaurants described in this document.
Financial Overview
Investment Range
$183,250 - $487,600
Franchise Fee (Low)
$18,000
Franchise Fee (High)
$35,000
Royalty %
6%
Equipment Costs (Low)
$90,000
Equipment Costs (High)
$290,000
Working Capital
$22,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Fat Shack Inc. has audited financial statements for the years ended December 31, 2024, 2023, and 2022. The auditor's report indicates an unqualified opinion, meaning the financial statements present fairly, in all material respects, the company's financial position and cash flows. A notable aspect of Fat Shack Inc.'s financial position is its advances of funds to related entities, with balances due from these parties totaling $412,871 as of December 31, 2024. The auditor did not raise any going concern qualifications regarding Fat Shack Inc.'s ability to continue operations.
Financing Details
Fat Shack Inc. does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any notes, leases, or other obligations that a franchisee might incur.
Performance Metrics
Total US Locations
29
Franchised Units
24
Corporate Units
5
Avg Square Footage
1,850
Franchising Since
2015
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Fat Shack Inc. has no litigation cases to report, as indicated in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Fat Shack Inc. has no bankruptcy history to disclose, as stated in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
7 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise, Fat Shack Inc. franchisees must provide written notice at least 180 days before their agreement expires. They must be in full compliance with the existing Franchise Agreement, pay a renewal fee of $6,000, and sign the then-current form of Franchise Agreement, which may have materially different terms. Franchisees are also required to sign a Successor Franchise Rider, which includes a general release of claims against Fat Shack Inc., and may need to renovate their restaurant location to meet current brand standards.
Training & Support Program
Franchisor Assistance
Fat Shack Inc. provides pre-opening assistance to its franchisees by offering specifications for the restaurant site and advice on build-out, design, equipment, and supplier selection. It also provides an initial training program for up to three individuals, including the managing owner and general manager, conducted in the Fort Collins, Colorado or Denver, Colorado metro areas. For a franchisee's first restaurant, Fat Shack Inc. offers up to 30 days of on-site opening assistance, with the franchisee covering daily fees for travel and room/board if representatives travel over 100 miles. Franchisees also receive an initial starting package of materials and guidance for grand opening marketing. Once the restaurant is open, Fat Shack Inc. provides continuing assistance through telephone and email consultations on operations, quality control, and menu items. It offers ongoing updates on menu developments and industry information. The franchisor may also provide training for replacement General Managers, for which tuition may be charged, and holds periodic conferences that franchisees may be required to attend.
Initial Training Hours
260
Training Location
Fort Collins, Colorado or Denver, Colorado metro areas
Ongoing Support
After opening, Fat Shack Inc. provides ongoing assistance to franchisees through consultations via telephone or email regarding restaurant operations, management, product quality control, menu items, and customer relations. The franchisor offers access to advertising and promotional materials and provides ongoing updates on menu items, industry information, and new products. Fat Shack Inc. may also train replacement General Managers and holds periodic conferences on topics like bookkeeping, product development, and advertising, which franchisees may be required to attend.
Franchise Requirements
Ideal Candidate Profile
Fat Shack Inc. requires that either the franchisee personally (or their managing owner, if an entity) or a designated General Manager devote full-time efforts to managing and operating the Fat Shack® Restaurant daily. The franchisee or managing owner must also be actively involved in business operations, overseeing tasks such as payroll and employee meetings. While direct day-to-day personal participation by the owner is not strictly required if a General Manager is in place, active business oversight is mandatory. All individuals in management roles must successfully complete Fat Shack Inc.'s mandatory training program.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Fat Shack Inc. grants franchisees a Protected Territory defined as a three-mile radius around the Fat Shack® Restaurant, measured from the front door. However, Fat Shack Inc. explicitly states that franchisees will not receive an exclusive territory and reserves the right to operate or license third parties to operate Fat Shack® Restaurants in 'Captive Audience Venues' and sell products through 'Special Venues and Channels' (e.g., grocery stores, Internet sales) within this protected area, without compensation to the franchisee.