For Chick Fil A, what is the 'Initial Term' of the lease agreement defined as?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
All rights and licenses not expressly granted to the Operator under this Agreement are reserved exclusively by and unto Chick-fil-A.
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Term.
Unless earlier terminated as provided in this Agreement, including pursuant to Section 4.e or Section 14 or as stated on the Food Truck License Summary, or pursuant to the Franchise Agreement, or upon the expiration or earlier termination of the Food Truck Lease, the initial term of this Agreement (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 or the Food Truck Lease, is sometimes referred to in this Agreement as the "Term." Unless this Agreement or the Franchise Agreement or the Food Truck Lease (as defined below) is terminated or expires earlier, the 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 Term; provided, however, that 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 Business or the Franchise Agreement is terminated or otherwise not renewed, as provided in Section 2.3 of the Franchise Agreement.
Chick-fil-A will have the right to change the terms and conditions of this Agreement upon a renewal of the Franchise Agreement pursuant to Section 2.4 of the Franchise Agreement (and renewal of this 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 Chick-fil-A in writing of the Operator's decision to either renew or not renew this Agreement upon the changed terms and conditions offered.
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, also known as the "Initial Term," starts on the effective date of the agreement and concludes on December 31st of the year in which the effective date falls.
Following the initial term, the agreement automatically extends for additional one-year periods. However, this extension is contingent upon both parties not providing written notice of intent to not renew at least 30 days before the term's end. The agreement cannot be renewed if the operator loses the right to renew their franchise agreement, especially concerning the business, or if the franchise agreement is terminated or not renewed as per Section 2.3 of the Franchise Agreement.
Chick-fil-A retains the authority to modify the agreement's terms and conditions upon renewal of the Franchise Agreement, as detailed in Section 2.4 of the Franchise Agreement. In such cases, Chick-fil-A must provide the operator with a written notice of these changes at least 45 days before the current term expires. The operator then has 15 days from the notice date to decide and inform Chick-fil-A of their decision to either accept the new terms and renew the agreement or decline to renew.