What bankruptcy filing is discussed in the Chick Fil A FDD?

According to Chick Fil A's 2025 Franchise Disclosure Document, Item 4 is amended in the New York Addendum to state that neither Chick Fil A, its affiliate, its predecessor, officers, or general partner during the ten-year period immediately preceding the date of the Franchise Disclosure Document: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the U.S. Bankruptcy Code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge for its debts under the U.S. Bankruptcy Code during or within 1 year after the officer or general partner of Chick Fil A held this position in the company or partnership. This declaration assures prospective franchisees that Chick Fil A and its leadership have maintained financial stability and have not been involved in bankruptcy proceedings, either directly or through their leadership roles in other entities, in the recent past. This information is crucial for potential franchisees as it provides insight into the financial health and management practices of Chick Fil A.

Additionally, the FDD states that an event of default may occur if a court enters an order for relief is entered in any case for the Operator (or, as applicable, the Operator-Owner) to take advantage of any bankruptcy or insolvency law of any jurisdiction, relative to the Operator (or, as applicable, the Operator-Owner), or a petition for such relief is filed against the Operator (or, as applicable, the Operator-Owner) and not dismissed or stayed within sixty (60) calendar days. This clause protects Chick Fil A from financial risks associated with franchisees facing bankruptcy or insolvency. If a franchisee becomes insolvent or seeks bankruptcy protection, Chick Fil A has grounds to terminate the lease agreement. This provision ensures that Chick Fil A can take swift action to mitigate potential losses and maintain the stability of its franchise network.

Furthermore, the Franchise Disclosure Document states that Chick-fil-A cautions the Operator not to rely on any representations, promises or agreements, oral or otherwise, not appearing in or attached to this Lease, the Franchise Agreement or in the FDD because among other things, no officer, employee, or other servant or agent of Chick-fil-A was or is authorized to make any representation, warranty, or other promise not contained in this Lease, the Franchise Agreement or the FDD. This clause emphasizes the importance of relying solely on the written agreements and disclosures provided by Chick Fil A, discouraging reliance on verbal promises or representations made by employees or agents. This protects both the franchisee and Chick Fil A by ensuring that all terms and conditions are clearly documented and agreed upon in writing, reducing the potential for misunderstandings or disputes.