What happens to the Chick Fil A agreement if the Franchise Agreement is terminated?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
onsent and approval of Chick-fil-A, and Licensor, contrary to Section 9 below; (iv) the Operator (or, as applicable, the Operator-Owner) violates, breaches or otherwise defaults in any of the terms of the Franchise Agreement, the DK Lease or the Additional Business Amendment, or the Franchise Agreement, the DK Lease or the Additional Business Amendment terminates or expires by lapse of time or otherwise; (v) the Operator or any of its officers, directors, members, employees, agents or contractors (including, without limitation, as applicable, the Operator-Owner) performs any act, neglects to perform any duty or fails to comply with any standard of conduct that would constitute a violation or default (or threatens to violate or default) under the DK Lease, any prime lease, ground lease or other title documents (or any document related to any of the above); (vi) the Operator vacates or abandons the Site.
- (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. Upon termination of the DK Lease and/or this Agreement, any payment made by the Operator to Chick-fil-A or Concessionaire 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 access to and possession of the DK Location(s) 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.
- (h) Notwithstanding anything to the contrary contained in this Agreement or in the Franchise Agreement, the terms of this Agreement and the Operator's use, occupancy, maintenance, repair and restoration of the Site are subject and subordinate to the terms, covenants, conditions, agreements and requirements of the DK Lease and any prime lease, ground lease or other title documents attached as exhibit(s) to the DK Lease.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the consequences of terminating the Franchise Agreement depend on the specific agreement in question, such as the Delivery Kitchen Agreement or the Food Truck Agreement. For the Delivery Kitchen Agreement, if the Franchise Agreement is terminated, the Delivery Kitchen Agreement will also immediately and automatically terminate as to the Delivery Kitchen Unit. Chick Fil A can elect to terminate the Franchise Agreement for all other businesses operated under it, without any further obligation or liability to the operator, by delivering written notice of termination to the operator.
Following the termination or expiration of the Delivery Kitchen Agreement, Chick Fil A has the right to re-enter and take possession of the site without needing any formal court action or further notice. The operator is required to leave the Delivery Kitchen location but remains responsible for any outstanding Use/Occupancy Charges, Equipment Fees, or other sums due to Chick Fil A or the licensor as specified in the Delivery Kitchen Lease or the Delivery Kitchen Agreement.
For the Food Truck Agreement, if the Franchise Agreement is terminated or expires with respect to the business, the Food Truck Agreement will automatically terminate or expire at the same time. Chick Fil A can also terminate the Food Truck Agreement for a default by the operator without terminating the Franchise Agreement, but Chick Fil A can elect to terminate the Franchise Agreement as well. Upon termination of the Food Truck Agreement, the operator will remain liable for the outstanding balance of the Food Truck Usage Fee, the Food Truck Insurance Fee, and any other payments due to Chick Fil A.