What happens to the Franchise Agreement if the Chick Fil A lease is terminated or expires?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
A default by the Operator under the DK Lease will also be a default under this Agreement and the Franchise Agreement.
Subject to Section 8 of this Agreement, if this Agreement is terminated or expires, then the Franchise Agreement shall also immediately and automatically terminate or expire as to the Delivery Kitchen Unit, 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.
The rights granted under this Agreement, including the sublicense granted in Subsection 2(a) of this Agreement, will also immediately and automatically terminate or expire effective as of the effective date of termination or expiration of this Agreement, and Chick-fil-A will have the right to enter upon and take possession of the Site and the Delivery Kitchen Unit without further formality and without the necessity of any court action, dispossessory proceeding, or further notice or legal proceedings whatsoever.
The Operator agrees to vacate the Site and the Delivery Kitchen Unit immediately upon the termination or expiration of this Agreement or the DK Lease and the accompanying sublicense and to permit the peaceable possession of the Site and the Delivery Kitchen Unit by Chick-fil-A or, at Chick-fil-A's election, a Chickfil-A affiliate or another Chick-fil-A franchisee.
Chick-fil-A may operate the DK Location(s) directly or through an affiliate or may offer the right to operate the DK Location(s) to another franchisee.
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 lease termination or expiration depend on the specific agreement in question. For a standard Chick Fil A restaurant, if the Franchise Agreement is terminated or expires with respect to the business, the Food Truck Lease will automatically terminate or expire at the same time.
For a Delivery Kitchen unit, if the Delivery Kitchen Lease is terminated or expires, the Franchise Agreement will also immediately and automatically terminate or expire as to the Delivery Kitchen Unit. Chick-fil-A can also elect to terminate the Franchise Agreement for other businesses operated under the same agreement. Upon termination or expiration, Chick-fil-A has the right to take possession of the site and the Delivery Kitchen Unit without any legal proceedings.
The franchisee, referred to as the Operator, must vacate the site immediately upon termination or expiration of the agreement or the Delivery Kitchen Lease. They must also allow Chick-fil-A, its affiliate, or another franchisee to take possession of the site. Chick-fil-A has the option to operate the Delivery Kitchen locations directly, through an affiliate, or by offering the operation rights to another franchisee. The Operator's obligations continue until they have fully performed them, even after termination or expiration.
These terms highlight the critical link between the lease and franchise agreements. A franchisee's ability to operate is entirely dependent on maintaining a valid lease. The franchisor retains significant control over the location and can quickly reassign it upon termination. Prospective franchisees should carefully consider these terms and ensure they understand the conditions under which their lease and franchise can be terminated, as this could result in a complete loss of their business.