What notice is required from Chick Fil A to terminate the Franchise Agreement along with this agreement?

According to Chick Fil A's 2025 Franchise Disclosure Document, Chick-fil-A can terminate the franchise agreement with 90 days prior written notice. However, Chick-fil-A can also terminate the agreement immediately upon notice and payment of the greater of $1,000 or an amount determined by a formula. Chick-fil-A can also terminate the agreement within the first 90 days of the term without notice or any payment, upon termination of the lease or any concession agreement or DK Lease for the site or upon the operator's death. Chick-fil-A states that they will not terminate the agreement without good cause.

This means that a Chick Fil A franchisee could face termination with only 90 days' notice under normal circumstances, but in certain situations, such as a lease termination or death, the termination can be immediate. The stipulation that Chick-fil-A will not terminate without good cause provides some reassurance, but the definition of "good cause" is not provided in this excerpt.

It is important to note that upon termination of the Franchise Agreement by Chick-fil-A, the franchisee has the option to require Chick-fil-A to repurchase all inventory bearing Chick-fil-A's trademarks that were sold to the franchisee for resale, at fair wholesale market value. This could help to mitigate some of the financial losses associated with a termination.

Prospective franchisees should seek clarification from Chick Fil A regarding what constitutes "good cause" for termination and under what specific circumstances the formula for immediate termination payment would be applied. Understanding these conditions is crucial for assessing the risks associated with the franchise agreement.