Under what circumstances can Chick Fil A terminate the franchise agreement immediately?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) Upon the occurrence of an Event of Default as set forth in Subsection 4(e) above, Chick-fil-A, in the exercise of its sole and exclusive business judgment, will have the right, upon its election, to terminate this Agreement immediately and to declare the Term of this Agreement ended upon delivering written notice of termination to Operator, without any further obligation or liability to the Operator.
If this Agreement is terminated under this Subsection 4(f) or otherwise terminates or expires, then: (i) the Franchise Agreement will also immediately and automatically terminate or expire as to the Delivery Kitchen DK Unit effective as of the effective date of termination or expiration of this Agreement and at the election of Chick-fil-A, in the exercise of its sole and exclusive business judgment, as to one or more or all of any other of the Businesses operated under the Franchise Agreement, effective as of the effective date of termination or expiration of this Agreement upon delivering written notice of termination to Operator, without any further obligation or liability to the Operator; and (ii) Chick-fil-A will have the right to re-enter upon and take possession of the Site without further formality and without the necessity of any court action, dispossessory proceeding, or further notice or legal proceedings whatsoever.
Chick-fil-A and the Operator also expressly acknowledge and agree that the termination, expiration, or revocation of the Franchise Agreement by either party for any reason, either in whole or in part, will also terminate this Agreement effective immediately, without further notice being required.
- (g) Upon termination or expiration of this Agreement, the Operator will quit and surrender the premises of the DK Location(s) to Chick-fil-A but the Operator will remain liable for the balance of the Use/Occupancy Charge, the Equipment Fee or any other sum due under this Agreement to Chick-fil-A or any payments due Licensor as provided in the DK 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 immediately if an Event of Default occurs as outlined in Subsection 4(e). This termination is at Chick-fil-A's sole discretion, exercised through their business judgment. To enact the termination, Chick-fil-A must provide written notice to the Operator, after which the agreement ends without any further obligation or liability to the Operator.
If Chick-fil-A terminates the agreement, the Franchise Agreement will also immediately terminate for the Delivery Kitchen Unit. Chick-fil-A can also elect to terminate the Franchise Agreement for one, some, or all of the other businesses operated under the Franchise Agreement. This termination is effective upon delivering written notice to the Operator, again without further obligation or liability. Chick-fil-A also has the right to re-enter and take possession of the site without needing any court action or legal proceedings.
The FDD also states that the termination, expiration, or revocation of the Franchise Agreement by either party, for any reason, in whole or in part, will also terminate the agreement immediately without any further notice required. Upon termination or expiration, the Operator must surrender the premises but remains liable for any outstanding charges, such as the Use/Occupancy Charge, Equipment Fee, or any other sums due to Chick-fil-A or the Licensor as per the DK Lease and the agreement.