What happens to the Chick Fil A agreement if the Food Truck Lease is terminated?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. The rights granted under this Agreement are contingent upon the Franchise Agreement, this Agreement, and the Food Truck Lease, being in full force and effect and the Operator otherwise being in good standing at the effective date of this Agreement and at all times during the term of this Agreement. If prior to the expiration of the term of this Agreement, the Franchise Agreement is terminated or expires with respect to the Business or the Food Truck Lease is terminated or expires, this Agreement will automatically terminate or expire at the same time. If the Franchise Agreement is in default at the effective date of this Agreement or at any time during the term of this Agreement (and has not been terminated), such default will also constitute a default by the Operator under this Agreement, and Chickfil-A may terminate the Operator's rights under this Agreement or suspend such rights until the default is cured.
- b. This Agreement and the rights granted hereunder may be terminated by Chick-fil-A for a default by the Operator under this Agreement or a default of the Food Truck Lease, without also terminating the Franchise Agreement, provided that Chick-fil-A, in the exercise of its sole and exclusive business judgment, shall have the right at its election to also terminate the Franchise Agreement as to the Business and one or more or all of any other of the Businesses operated under the Franchise Agreement by providing written notice to the Operator pursuant to the terms of the Franchise Agreement. Subject to Section 15, this Agreement and the rights granted under this Agreement, will terminate automatically upon the Food Truck Lessor or Chick-fil-A taking possession of the Food Truck following the expiration or termination of this Agreement or the Food Truck Lease. The Operator's obligations under this Agreement and the Food Truck Lease will survive until the Operator
has fully performed the same. 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 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 Fee, the Food Truck Insurance Fee and any other payments due Chick-fil-A or the Food Truck Lessor as provided in the Food Truck Lease and/or in this Agreement. The Operator agrees that upon default the Food Truck Lessor 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 Chick-fil-A or the Food Truck Lessor 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) pursuant to the terms and conditions of the Food Truck Agreement, operate as a waiver of the right of the Food Truck Lessor or, as applicable, 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.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the rights granted under the agreement are contingent upon the Franchise Agreement, the agreement itself, and the Food Truck Lease being in full force and effect. If the Food Truck Lease is terminated or expires before the agreement's term ends, the agreement will automatically terminate or expire simultaneously.
Chick Fil A also has the right to terminate the agreement if there is a default under the Food Truck Lease, even without terminating the Franchise Agreement. However, Chick Fil A can choose to terminate the Franchise Agreement as well, for the specific business or all businesses operated under the Franchise Agreement, by providing written notice to the operator.
Upon termination of the agreement, the operator is responsible for any outstanding balances, such as the Food Truck Usage Fee and Food Truck Insurance Fee, as outlined in the Food Truck Lease and the agreement. Payments made by the operator after the Food Truck Lease termination will not reinstate or extend the agreement, affect any prior notices, or waive Chick Fil A's right to repossess the Food Truck. All collected funds will be applied towards the operator's outstanding balances.