What financial obligations does the Operator have upon termination of the Chick Fil A agreement?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
undertaken thereunder, which will survive until the Operator has fully performed the same), will expire automatically upon Chick-fil-A retaking possession of the Food Truck following the expiration or termination of this Agreement and the Operator's fulfillment of the Operator's obligations under this Agreement, including under the sublease granted in Section 4 of this Agreement. Notwithstanding anything to the contrary in this Agreement, the Operator further acknowledges and agrees that Chick-fil-A has the right, in Chick-fil-A's sole and exclusive business judgment, to terminate this Agreement, including the sublease granted in Section 4, and/or the Food Truck Program at any time for any reason or for no reason.
- c. The Operator will bear any and all risk arising from or related to termination of this Agreement. Upon termination of this Agreement, the Operator will remain liable for the then current outstanding balance of the Food Truck Usage Fee, the Food Truck Insurance Fee and any other payments due Chick-fil-A or BALC as provided in the Food Truck Lease and/or in this Agreement. The Operator agrees that upon default BALC 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. Upon termination of the Food Truck Lease and/or this Agreement, any payment made by the Operator to Chickfil-A or BALC or any court will not: (i) reinstate, continue or extend the term of this Agreement; (ii) affect any notice previously given to the Operator; or (iii) operate as a waiver of the right of Chick-fil-A to obtain possession of the Food Truck by proper suit, action, proceeding or remedy. All monies collected will be deemed to be payments made in accordance with the terms of this Agreement or applied toward any outstanding balances owed by the Operator.
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- Survival. Upon the termination, expiration, or suspension of this Agreement as provided in Section 14, all obligations under this Agreement, including under the sublease granted in Section 4 of this Agreement and also including without limitation the obligations under the Franchise Agreement which are incorporated by reference into this Agreement, that expressly or by their nature are intended to survive the termination or expiration of this Agreement or the Franchise Agreement, including, but not limited to, limitations of liability, and the Operator's reporting, payment and indemnification obligations to Chick-fil-A and/or BALC, will survive the termination, expiration or suspension of this Agreement, including the sublease granted in Section 4 of this Agreement, the Food Truck Lease, and the termination of the Franchise Agreement, if applicable.
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- Communications; Notices; Designated Contact.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the Operator bears all risks related to the termination of the agreement. Upon termination, the Operator is liable for the outstanding balance of the Food Truck Fee, the Food Truck Insurance Fee, and any other payments due to Chick-fil-A or the Food Truck Lessor, as outlined in the Food Truck Lease or the agreement itself. The Food Truck Lessor can collect any monies due after a default without affecting the default status. Payments made by the Operator do not reinstate the agreement, affect prior notices, or waive Chick-fil-A's right to repossess the Food Truck. All collected monies will be applied towards outstanding balances owed by the Operator.
All obligations under the agreement, including those incorporated from the Franchise Agreement, that are intended to survive termination, such as limitations of liability, reporting, payment, and indemnification obligations to Chick-fil-A and/or the Food Truck Lessor, will remain in effect. This survival clause extends to the Food Truck Lease and the Franchise Agreement, if applicable.
Upon termination or expiration of the Delivery Kitchen (DK) Agreement, the Operator must surrender the premises of the DK Location(s) to Chick-fil-A. However, the Operator remains liable for the balance of the Use/Occupancy Charge, the Equipment Fee, or any other sum due under the agreement to Chick-fil-A, as well as any payments due to the Licensor as provided in the DK Lease and/or the agreement. The Licensor can collect any monies due after a default without affecting the default status.