Does Chick Fil A have to terminate the sublease granted in Section 4 if it terminates this agreement?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
s not convey any benefits to any third party and does not prevent the Operator or Chick-fil-A from seeking indemnification from another third party whose actions, or the actions of such third party's employee, were the source of any injury, damage or loss. This section is in addition to any obligations of the Operator to BALC and others that may be named in the Food Truck Lease.
14. Default; Termination.
a. The rights granted under this Agreement are contingent upon the Franchise Agreement and this Agreement, including the Food Truck Lease, being in full force and effect and the Operator otherwise being in good standing at the effective date of this Agreement and at all times during the term of this Agreement. If prior to the expiration of the term of this Agreement, the Franchise Agreement is terminated or expires with respect to the Business or the Food Truck Lease is terminated or expires, this Agreement, including the sublease granted in Section 4 of this Agreement, will automatically terminate or expire at the same time. If the Franchise Agreement is in default at the effective date of this Agreement or at any time during the term of this Agreement (and has not been terminated), such default will also constitute a default by the Operator under this Agreement, and Chick-fil-A may terminate the Operator's rights under
- this Agreement, including the sublease granted in Section 4 of this Agreement, or suspend such rights until the default is cured.
- b. This Agreement and the rights granted hereunder may be terminated for a default under this Agreement, including a default under the sublease granted in Section 4 of this Agreement by reason of a default of the Food Truck Lease, without also terminating the Franchise Agreement, provided that Chick-fil-A, in the exercise of its sole and exclusive business judgment, shall have the right at its election to also terminate the Franchise Agreement as to the Business and one or more or all of any other of the Businesses operated under the Franchise Agreement by providing written notice to the Operator pursuant to the terms of the Franchise Agreement. Subject to Section 15, this Agreement and the rights granted under this Agreement, including the sublease granted in Section 4 of this Agreement (but not the obligations the Operator has undertaken thereunder, which will survive until the Operator has fully performed the same), will expire automatically upon Chick-fil-A retaking possession of the Food Truck following the expiration or termination of this Agreement and the Operator's fulfillment of the Operator's obligations under this Agreement, including under the sublease granted in Section 4 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 this Agreement, including the sublease granted in Section 4, and/or the Food Truck Program at any time for any reason or for no reason.
- c. The Operator will bear any and all risk arising from or related to termination of this Agreement. Upon termination of this Agreement, the Operator will remain liable for the then current outstanding balance of the Food Truck Usage Fee, the Food Truck Insurance Fee and any other payments due Chick-fil-A or BALC as provided in the Food Truck Lease and/or in 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 agreement, including the sublease granted in Section 4, at any time, for any reason, or for no reason. This means that if Chick-fil-A terminates the agreement, the sublease is also terminated.
If the Franchise Agreement is terminated or expires, the agreement, including the sublease granted in Section 4, will automatically terminate or expire at the same time. If the Franchise Agreement is in default, Chick-fil-A may terminate the Operator's rights under the agreement, including the sublease granted in Section 4, or suspend such rights until the default is cured.
Upon termination of the agreement, all obligations under the agreement, including under the sublease granted in Section 4, that are intended to survive the termination will do so. This includes obligations under the Franchise Agreement that are incorporated by reference into this agreement, such as limitations of liability and the Operator's reporting, payment, and indemnification obligations to Chick-fil-A and/or BALC.