Under what conditions can Chick Fil A terminate the Chick Fil A agreement, including the sublease?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
rm 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. The Operator agrees that upon default BALC may demand, receive and collect any monies due or falling due after the default without in any manner affecting the status of the default or any notice of suit, action, order or judgment related to the default. Upon termination of the Food Truck Lease and/or this Agreement, any payment made by the Operator to Chickfil-A or BALC or any court will not: (i) reinstate, continue or extend the term of this Agreement; (ii) affect any notice previously given to the Operator; or (iii) operate as a waiver of the right of Chick-fil-A to obtain possession of the Food Truck by proper suit, action, proceeding or remedy. All monies collected will be deemed to be payments made in accordance with the terms of this Agreement or applied toward any outstanding balances owed by the Operator.
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- Survival. Upon the termination, expiration, or suspension of this Agreement as provided in Section 14, all obligations under this Agreement, including under the sublease granted in Section 4 of this Agreement and also including without limitation the obligations under the Franchise Agreement which are incorporated by reference into this Agreement, that expressly or by their nature are intended to survive the termination or expiration of this Agreement or the Franchise Agreement, including, but not limited to, limitations of liability, and the Operator's reporting, payment and indemnification obligations to Chick-fil-A and/or BALC, will survive the termination, expiration or suspension of this Agreement, including the sublease granted in Section 4 of this Agreement, the Food Truck Lease, and the termination of the Franchise Agreement, if applicable.
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- Communications; Notices; Designated Contact.
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 broad rights to terminate the agreement and sublease with an operator. Chick-fil-A can terminate the agreement if the operator defaults under the agreement, including defaulting on the sublease due to a default on the Food Truck Lease. Chick-fil-A can choose to terminate the Franchise Agreement along with the sublease, or just the sublease.
Additionally, Chick-fil-A retains the right to terminate the agreement and sublease, and/or the Food Truck Program at any time, for any reason, or for no reason at all, based on Chick-fil-A's sole and exclusive business judgment. This clause gives Chick-fil-A significant latitude in ending the agreement.
The agreement can also be terminated if the Franchise Agreement terminates or expires, or if the operator defaults under the Franchise Agreement. Chick-fil-A can also terminate the agreement if changes to other aspects of the business affect the operator's ability to fulfill their obligations under the agreement, including the sublease. If the operator fails to provide timely notice to Chick-fil-A of a decision to either renew or not renew the agreement upon changed terms and conditions offered, it will be deemed an election by the Operator to terminate this Agreement at the end of such Term.
Upon termination, the operator bears all risks and remains liable for outstanding balances, including the Food Truck Usage Fee and Food Truck Insurance Fee. Any payments made by the operator do not reinstate the agreement or waive Chick-fil-A's right to repossess the Food Truck. All obligations of the operator, including those under the sublease and Franchise Agreement, that are intended to survive termination, such as limitations of liability and payment obligations, will remain in effect.