When does the initial term of the Chick Fil A Agreement for an Additional Business end?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Term; Termination.
(a) Unless earlier terminated as provided in this Agreement or in the Franchise Agreement, the initial term of this Agreement with respect to the Delivery Kitchen Unit (the "Initial Term") will commence as of the Effective Date of this Agreement and will end on the Thirty-first Day of December of the year in which the Effective Date occurs. The Initial Term, together with any and all extensions of the Initial Term and subject to the rights for earlier termination or expiration pursuant to this Agreement or the Franchise Agreement, is sometimes referred to in this Agreement as the "Agreed Term" or the "Term." Unless this Agreement, the Franchise Agreement or the DK Lease is terminated earlier, the Agreed Term of this Agreement will be automatically extended for successive additional periods of one (1) year, unless written notice of intent not to renew either the Franchise Agreement or this Agreement is given by either party to the other at least thirty (30) days prior to the end of the Agreed Term; provided however, this Agreement may not be renewed if the Operator does not have the right to renew the Franchise Agreement or does not have the right to renew the Franchise Agreement with respect to the Delivery Kitchen Unit or the Franchise Agreement is otherwise terminated or not renewed, as provided in Section 2.3 of the Franchise Agreement. In addition to Chick-fil-A's right to amend or modify the DK Lease pursuant to this Agreement, Chick-fil-A will have the right to change the terms and conditions of this Agreement upon a renewal pursuant to Section 2.4 of the Franchise Agreement by giving the Operator a written notice of the
changed terms and conditions at least forty-five (45) days prior to the end of the then-current Term, in which case the Operator will have fifteen (15) days from the date of the notice to decide and to notify Chickfil-A in writing of the Operator's decision to either renew or not renew upon the changed terms and conditions offered. The Operator's failure to provide timely notice to Chick-fil-A of a decision to either renew or not renew upon the changed terms and conditions offered will be deemed to be an election by the Operator to terminate this Agreement at the end of such Agreed Term.
- (b) The rights granted under this Agreement are contingent upon the Franchise Agreement, the Additional Business Amendment, this Agreement and the DK Lease being in full force and effect.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the initial term of the agreement for an Additional Business, such as a Delivery Kitchen Unit or Captive Venue Unit, commences on the Effective Date of the agreement. The initial term concludes on December 31st of the same year in which the Effective Date falls.
This means that regardless of whether the agreement is signed in January or November, the initial term will always end on December 31st of that year. This structure provides a consistent renewal timeframe for Chick Fil A and its operators.
Following the initial term, the agreement automatically extends for successive one-year periods. However, this extension is contingent upon both parties not providing written notice of intent to not renew at least thirty days before the term's end. Additionally, the agreement's renewal is dependent on the operator's right to renew the overarching Franchise Agreement, particularly concerning the specific business unit in question. If the Franchise Agreement is terminated or not renewed, the Additional Business agreement cannot be renewed either.
Chick-fil-A retains the right to modify the agreement's terms upon renewal of the Franchise Agreement, providing the operator with a written notice of these changes at least forty-five days before the term's end. The operator then has fifteen days to decide whether to accept the new terms and notify Chick-fil-A accordingly. Failure to provide timely notice is considered an election to terminate the agreement at the end of the current term. The rights granted under the Additional Business agreement are contingent upon the Franchise Agreement, the Additional Business Amendment, and any relevant lease agreements remaining in full effect.