Does Chick Fil A need a specific reason to terminate the sublease granted in Section 4?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
he Operator for the Licensed Use pursuant to the terms and conditions of this Agreement and the Franchise Agreement. If (a) the Franchise Agreement terminates or expires, (b) the Operator is in default under the Franchise Agreement, or (c) other aspects of the
Business change affecting the Operator's ability to perform the Operator's obligations under this Agreement, including the sublease of the Food Truck Lease granted in Section 4 of this Agreement, as determined by Chick-fil-A in the exercise of its sole and exclusive business judgment, then Chick-fil-A will have the right to terminate this Agreement and the Operator will bear any and all risk arising from or related to the termination of this Agreement. Notwithstanding anything to the contrary in this Agreement, the Operator further acknowledges and agrees that Chick-fil-A has the right, in Chick-fil-A's sole and exclusive business judgment, to terminate or suspend this Agreement or temporarily suspend or interrupt the Food Truck Program at any time for any reason or for no reason, including without limitation, to use the Food Truck at another location and/or for a different purpose (an "Alternate Use").
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, Chick-fil-A has broad discretion to terminate the sublease granted in Section 4. Specifically, Chick-fil-A can terminate the agreement, including the sublease, at any time, for any reason, or even for no reason at all. This right is explicitly stated as being within Chick-fil-A's "sole and exclusive business judgment."
This provision gives Chick Fil A significant control over the Food Truck Program and the sublease agreement. It means that a Chick Fil A operator faces the risk that their sublease could be terminated without cause, potentially disrupting their business operations. The operator bears all risks associated with such a termination.
However, even if the agreement is terminated, the operator remains liable for outstanding balances, such as the Food Truck Usage Fee and the Food Truck Insurance Fee. This highlights the importance of understanding all financial obligations and potential risks before entering into the agreement. The obligations of the operator, as well as the rights of Chick-fil-A, survive any expiration, termination, or other cancellation.
This level of franchisor control is not uncommon in the franchise industry, where franchisors often retain significant rights to protect their brand and business model. However, prospective Chick Fil A franchisees should carefully consider the implications of this termination clause and ensure they are comfortable with the associated risks.