What happens if a Chick Fil A operator subleases the premises?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon default of your lease, sublease or sublicense obligations or equipment rental obligations under the Lease, Concession Sublicense Agreement for a captive venue unit or Delivery Kitchen Agreement for a delivery kitchen unit, your liability could include termination of your lease, sublease, sublicense or equipment rental, termination of the Franchise Agreement including its attached Lease(s) and/or any Concession Sublicense Agreement(s) and loss of franchise, and/or payment of entire unpaid amounts and interest, costs of recovery, cost of collection and attorneys' fees and/or reimbursement of Chick-fil-A's costs to perform the obligations you failed to perform together with interest. (Franchise Agreement, Sections 14.11 and 24; Lease, Section 10; Concession Sublicense Agreement, Sections 4 and 9; Assignment and Consent to Assignment Agreement, Section 6.6). If you holdover or remain in occupancy of the premises for a non-captive venue and non- delivery kitchen location after your Lease terminates or expires, the base rent and percentage rent will double, as liquidated damages and not as a penalty, but payment will not waive Chick-fil-A's other rights or remedies. (Lease, Section 11.) If you fail to perform your obligations under the Lease, for a captive venue unit under the Concession Sublicense Agreement, including the Concession Agreement, or for a delivery kitchen unit under a Delivery Kitchen Agreement, Chick-fil-A may perform and you will reimburse Chick-fil-A's cost, together with interest. (Lease, Section 10.6; Concession Sublicense Agreement and Delivery Kitchen Agreement, Section 5). Upon default of your obligations under the Food Truck License Agreement for a food truck, your liability could include termination of the Food Truck License Agreement, potentially termination of the Franchise Agreement including its attached Lease(s) and/or any Concession Sublicense Agreement(s) and loss of franchise, and/or payment of entire unpaid amounts and interest, costs of recovery, cost of collection and attorneys' fees and/or reimbursement of Chick-fil-A's costs to perform the obligations you failed to perform together with interest. (Franchise Agreement, Sections 14.11 and 24; Food Truck License Agreement, Section 14).
Source: Item 10 — Financing (FDD pages 51–55)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, Chick-fil-A leases or subleases restaurant premises to its Operators. If a Chick-fil-A operator defaults on their lease, sublease, or sublicense obligations, several consequences may occur. These include the termination of the lease, sublease, sublicense, or equipment rental agreements. Additionally, the Franchise Agreement itself, along with any attached leases or Concession Sublicense Agreements, could be terminated, leading to a loss of the franchise.
Furthermore, the operator may be liable for the entire unpaid amount, including interest, recovery costs, collection costs, and attorneys' fees. They may also be required to reimburse Chick-fil-A for any costs incurred by Chick-fil-A to perform the obligations that the operator failed to fulfill, along with interest.
If an operator remains in occupancy of the premises after the lease terminates or expires for a non-captive venue and non-delivery kitchen location, the base rent and percentage rent will double as liquidated damages. However, this payment does not waive Chick-fil-A's other rights or remedies. Chick-fil-A may perform the obligations under the Lease, Concession Sublicense Agreement, or Delivery Kitchen Agreement if the operator fails to do so, and the operator will be required to reimburse Chick-fil-A's costs, along with interest.