Under what conditions are the rights granted under the Chick Fil A agreement contingent?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. The rights granted under this Agreement are contingent upon the Franchise Agreement, this Agreement, and 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 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 Chickfil-A may terminate the Operator's rights under this Agreement or suspend such rights until the default is cured.
- b. This Agreement and the rights granted hereunder may be terminated by Chick-fil-A for a default by the Operator under this Agreement or 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, will terminate automatically upon the Food Truck Lessor or Chick-fil-A taking possession of the Food Truck following the expiration or termination of this Agreement or the Food Truck Lease. The Operator's obligations under this Agreement and the Food Truck Lease will survive until the Operator has fully performed the same. 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 and/or the Food Truck Program at any time for any reason or for no reason.
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the rights granted to an operator under the agreement are contingent upon several conditions. Specifically, the Franchise Agreement, the Agreement itself, and the Food Truck Lease must be in full force and effect. Additionally, the operator must be in good standing both at the effective date of the agreement and at all times during its term. This means that if any of these agreements are not active or if the operator falls out of good standing, their rights under the agreement could be affected.
If the Franchise Agreement is terminated or expires concerning the business, or if the Food Truck Lease is terminated or expires before the term of the agreement ends, the agreement will automatically terminate or expire simultaneously. Furthermore, if the Franchise Agreement is in default at the effective date of the agreement or at any point during its term, and the default has not been resolved, Chick Fil A has the right to terminate the operator's rights under the agreement or suspend those rights until the default is corrected.
Chick Fil A also retains the right to terminate the agreement for a default by the operator under the agreement or a default of the Food Truck Lease, even without terminating the Franchise Agreement. Moreover, Chick Fil A can terminate the Franchise Agreement as it pertains to the business, or any other businesses operated under the Franchise Agreement, at its discretion by providing written notice to the operator. The agreement and the rights granted under it will automatically terminate if the Food Truck Lessor or Chick Fil A takes possession of the Food Truck following the expiration or termination of the agreement or the Food Truck Lease. The operator's obligations under the agreement and the Food Truck Lease will continue until fully performed. Chick Fil A also retains the right to terminate the agreement and/or the Food Truck Program at any time, for any reason or no reason, according to its sole and exclusive business judgment.