What actions can Chick Fil A take if the Franchise Agreement is in default?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) Upon the occurrence of an Event of Default as set forth in Subsection 4(e) above, Chick-fil-A, in the exercise of its sole and exclusive business judgment, will have the right, upon its election, to terminate this Agreement immediately and to declare the Term of this Agreement ended upon delivering written notice of termination to Operator, without any further obligation or liability to the Operator.
If this Agreement is terminated under this Subsection 4(f) or otherwise terminates or expires, then: (i) the Franchise Agreement will also immediately and automatically terminate or expire as to the Delivery Kitchen DK Unit effective as of the effective date of termination or expiration of this Agreement and at the election of Chick-fil-A, in the exercise of its sole and exclusive business judgment, as to one or more or all of any other of the Businesses operated under the Franchise Agreement, effective as of the effective date of termination or expiration of this Agreement upon delivering written notice of termination to Operator, without any further obligation or liability to the Operator; and (ii) Chick-fil-A will have the right to re-enter upon and take possession of the Site without further formality and without the necessity of any court action, dispossessory proceeding, or further notice or legal proceedings whatsoever.
Chick-fil-A and the Operator also expressly acknowledge and agree that the termination, expiration, or revocation of the Franchise Agreement by either party for any reason, either in whole or in part, will also terminate this Agreement effective immediately, without further notice being required.
- (g) Upon termination or expiration of this Agreement, the Operator will quit and surrender the premises of the DK Location(s) to Chick-fil-A but the Operator will remain liable for the balance of the Use/Occupancy Charge, the Equipment Fee or any other sum due under this Agreement to Chick-fil-A or any payments due Licensor as provided in the DK Lease and/or in this Agreement.
The Operator agrees that upon default Licensor may demand, receive and collect any monies due or falling due after the default without in any manner affecting the status of the default or any notice of suit, action, order or judgment related to the default.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, several actions can be taken if the Franchise Agreement is in default. Chick-fil-A has the right to terminate the agreement immediately by delivering written notice to the operator. This termination is based on Chick-fil-A's sole business judgment, without further obligation or liability to the operator.
If the agreement is terminated or expires, the Franchise Agreement will also immediately terminate or expire for the Delivery Kitchen Unit. Chick-fil-A can also elect to terminate the Franchise Agreement for one or more or all of the other businesses operated under the Franchise Agreement. Chick-fil-A also has the right to re-enter and take possession of the site without needing any court action or legal proceedings.
Upon termination or expiration of the agreement, the operator must vacate and surrender the premises of the Delivery Kitchen location to Chick-fil-A. However, the operator remains liable for any outstanding Use/Occupancy charges, Equipment Fees, or any other sums due under the agreement, including payments due to the licensor as outlined in the Delivery Kitchen Lease. A default by the operator under the Delivery Kitchen Lease also constitutes a default under both the agreement and the Franchise Agreement.