Does Chick Fil A have the right to terminate the agreement at any time for any reason?

According to Chick Fil A's 2025 Franchise Disclosure Document, Chick-fil-A has specific rights regarding the termination of agreements with its operators. In the context of the Food Truck Program, Chick-fil-A retains the right to terminate the agreement at any time, for any reason, or for no reason, based on its sole and exclusive business judgment. This clause provides Chick-fil-A with broad discretionary power over the continuation of the agreement.

Additionally, Chick-fil-A can terminate the agreement if the Franchise Agreement is terminated or expires, or if the operator defaults on the Franchise Agreement or the Food Truck Lease. In cases of operator default, Chick-fil-A can choose to terminate the agreement or suspend the operator's rights until the default is resolved. Furthermore, Chick-fil-A can terminate the agreement if changes to the business affect the operator's ability to fulfill their obligations, as determined by Chick-fil-A.

In certain situations, Chick-fil-A may terminate the agreement without cause, particularly concerning one or more of the businesses operated by the operator. In such cases, Chick-fil-A is obligated to provide written notice and compensate the operator with either $1,000 or one-twelfth of the total base profit and additional profit paid to the operator for the preceding twelve months, whichever is greater. This compensation is considered liquidated damages to cover the operator's potential losses due to termination. During the initial period before the commencement date or within 90 days following it, Chick-fil-A can terminate the agreement without cause, without any obligation for compensation.

These termination clauses highlight the importance for prospective Chick Fil A franchisees to carefully consider the terms of the agreement and understand the conditions under which Chick-fil-A can terminate the agreement, as well as any associated financial implications. The broad discretionary powers granted to Chick-fil-A in these agreements could pose a significant risk to the franchisee's investment and business operations.