factual

What is the Operator's obligation to Chick Fil A in consideration for the lease of the Equipment?

Chick_Fil_A Franchise · 2025 FDD

Answer from 2025 FDD Document

In consideration of the lease of the Equipment, the Operator will pay to Chick-fil-A when due, the Equipment Rental stated in Exhibit B.

Source: Item 23 — Receipts (FDD pages 103–600)

What This Means (2025 FDD)

According to Chick Fil A's 2025 Franchise Disclosure Document, the Operator is obligated to pay Chick-fil-A the Equipment Rental fee when it is due, as specified in Exhibit B of the agreement. This fee is in direct consideration for the lease of the Equipment provided by Chick-fil-A for use in the Captive Venue Unit or Delivery Kitchen Unit. The Equipment includes all items delivered or to be delivered to the site, as detailed in the Equipment Lease Addendum, along with any replacements, additions, or accessions to the original equipment.

For the Delivery Kitchen Unit, Chick-fil-A will develop and equip the DK and deliver the Location to Operator for the Licensed Use under the terms and conditions of this Agreement and the DK Lease. Chick-fil-A is not liable for any loss or damage to Operator due to a delay or failure to deliver the DK Location or any vehicle or equipment relating to the DK or the Licensed Use if the delay is the result of fire, act of God, destruction or damage, weather conditions, strike, labor dispute, delay in transportation, governmental requirements or any other cause beyond Chick-fil-A's reasonable control.

For a Delivery Kitchen Location, the Operator will pay Chick-fil-A a monthly rental fee for the Equipment based on its then-current fair market rental value, which Chick-fil-A will determine. Chick-fil-A can re-determine this Equipment Fee periodically based on factors like additions, subtractions, modifications to the Equipment, market factors, inflation, or the passage of time. Any updates to the Equipment Fee will be documented in a revised Equipment Lease Addendum. The Operator is also responsible for all costs and expenses related to operating and maintaining the Equipment, including maintaining it in good condition, with the exception of ordinary wear and tear.

If the Operator fails to meet their obligations under the Food Truck Lease, Chick-fil-A has the option to perform those obligations and charge the Operator for the costs incurred, along with interest as per Section 14.11 of the Franchise Agreement. Additionally, if the Food Truck is sold for less than its depreciated value due to the Operator's failure to make payments, Chick-fil-A will charge the Operator for any amounts they are required to remit to the Food Truck Lessor. Conversely, Chick-fil-A will realize any gain if the Food Truck is sold after Chick-fil-A has performed on behalf of a defaulting Operator.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.