What agreements outline the Chick Fil A franchisee's obligations regarding site selection and acquisition/lease?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
e Document.
Chick-fil-A's franchise relationship with its Operators is governed and defined by a written franchise agreement including its attached lease(s) (or other occupancy agreement(s) for captive venue units and delivery kitchen units), which is referred to in this Disclosure Document as a "Franchise Agreement". The lease(s) attached as an exhibit to, made a part of and incorporated by reference into your Franchise Agreement (the "Lease") governs your occupancy of each restaurant premises under the Franchise Agreement controlled by Chick-fil-A. In some instances where Chick-fil-A, as lessee under a prime lease or ground lease, subleases the Chick-fil-A Restaurant premises to an Operator, a wholly-owned subsidiary of Chickfil-A may be the landlord of the premises. As of this Disclosure Document's issuance date, Chick-fil-A is affiliated with the following entities that may lease a Chick-fil-A Restaurant site to Chick-fil-A for which you may be a sub-lessee: (1) CFA NC Townridge Square LLC, a Georgia limited liability company formed on December 31, 1998, with an address of 5200 Buffington Road, Atlanta, Georgia 30349, (2) CFA Real Property I, LLC, a Georgia limited liability company formed on June 26, 2007, with an address of 5200 Buffington Road, Atlanta, Georgia 30349, and (3) FSU Holdings One, LLC, a Georgia limited liability company formed on December 7, 2007, with an address of 5200 Buffington Road, Atlanta, Georgia 30349.
Captive venue units are located in non-traditional restaurant premises and are typically governed by a concession agreement between Chick-fil-A (or its affiliate) and the owner or manager of the premises (the "Concession Agreement"). The Concession Agreement typically governs Chick-fil-A's occupancy of the
captive venue unit premises. Chick-fil-A sublicenses its rights and privileges under the Concession Agreement, and the Operator accepts the sublicense and agrees to faithfully perform Chick-fil-A's obligations under the Concession Agreement under a concession sublicense agreement (the "Concession Sublicense Agreement"). The Concession Agreement is attached as an exhibit to the Concession Sublicense Agreement. The Concession Sublicense Agreement with its attached Concession Agreement is made a part of and incorporated by reference into your Franchise Agreement and substitutes for the Lease(s) as the occupancy agreement for any captive venue unit premises you may operate.
Delivery kitchen units are also located in non-traditional restaurant premises and are typically governed by a written delivery kitchen agreement between Chick-fil-A and a third-party owner, operator or manager of the premises where a delivery kitchen unit is located (the "DK Lease"). The DK Lease typically governs Chick-fil-A's occupancy of the delivery kitchen unit premises. Chick-fil-A sublicenses or subleases as applicable its rights and privileges under the DK Lease, and the Operator accepts the sublicense or sublease as applicable and agrees to faithfully perform Chick-fil-A's obligations under the DK Lease under a delivery kitchen agreement (the "Delivery Kitchen Agreement"). The DK Lease is attached as an exhibit to the Delivery Kitchen Agreement. The Delivery Kitchen Agreement with its attached DK Lease is made a part of and incorporated by reference into your Franchise Agreement and substitutes for the Lease(s) as the occupancy agreement for any delivery kitchen unit premises you may operate.
Upon entering into a Franchise Agreement to become a franchised Operator of your first franchised Chick-fil-A Restaurant business, a Chick-fil-A Operator pays an initial franchise fee of $10,000, of which $5,000 is deemed fully earned and non-refundable upon payment and $5,000 is deemed to be, and is maintained by Chick-fil-A as, an initial payment of working capital for the business(es) under the Franchise Agreement, with the expectation that the franchised Operator will make a substantial, personal investment of time directly operating, directing and otherwise supervising the Chick-fil-A Restaurant business (see Items 5, 6, 7 and 15).
Source: Item 9 — Franchisee's Obligations (FDD pages 49–51)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the franchise relationship between Chick Fil A and its Operators is primarily governed by a written Franchise Agreement that includes attached lease(s). These leases dictate the terms of occupancy for each restaurant premise controlled by Chick Fil A. In cases where Chick Fil A subleases the premises from a prime lease or ground lease, a wholly-owned subsidiary of Chick Fil A may act as the landlord.
The Franchise Agreement and its attached Lease(s) outline the obligations of the franchisee (referred to as the Operator) regarding the site. The Operator cannot assign the lease or their interest in the site, sublet the site, or allow any other entity to occupy the site without Chick Fil A's express written consent. Any attempted assignment or sublet without approval is considered void and does not release the Operator from their obligations under the lease. Chick Fil A retains the right to assign the lease to any entity at its discretion.
Furthermore, the FDD specifies that the prime lease, ground lease, and other real estate documents are subject to periodic changes. These changes can affect the obligations imposed on Chick Fil A for a site, which in turn can alter the terms of the franchisee's lease with Chick Fil A. This includes potential changes to monthly payments, base rent, percentage rent, taxes, common area maintenance charges, and other additional costs. The franchisee's rights to use and enjoy the premises, including aspects like signage, physical layout, parking, and exclusive rights, can also be modified during the term of the Franchise Agreement.
In some instances, Chick Fil A may acquire ownership of the restaurant premises. Should this occur, the franchisee's existing sublease will terminate, and the franchisee will become either a lessee or sublessee of the premises. In either case, the franchisee must comply with the obligations set by Chick Fil A, including making monthly lease payments, as determined by Chick Fil A's business judgment.