Does Chick Fil A have to provide a reason to terminate the agreement?
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.
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 the right to terminate the Food Truck Program agreement at any time, for any reason or for no reason. This is according to item 14, subsection b.
This means that Chick Fil A has broad discretion in ending the agreement with an operator. The operator bears all risks related to the termination of the agreement and will remain liable for any outstanding Food Truck Usage Fees, Food Truck Insurance Fees, and other payments due to Chick-fil-A or BALC.
This clause gives significant power to Chick Fil A, as they are not obligated to provide justification or cause for ending the agreement. A prospective franchisee should carefully consider this aspect and its potential implications for their investment and business operations. It is advisable to seek legal counsel to fully understand the risks associated with such termination clauses.