What constitutes a default by a Churchs Chicken sublessee that allows the Sublessor to terminate the sublease?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
It is mutually agreed that, in the event Sublessee shall default in the payment of base rental or additional rent as herein set forth, when due, and fails to cure said default within five (5) days after receipt of written notice thereof from Sublessor; or, if Sublessee shall be in default in performing any of the terms or provisions of this Sublease or the Master Lease other than the provision requiring the payment of rent and fails to cure such default within fifteen (15) days (unless a shorter period is imposed under the Master Lease) after the date of receipt of written notice of default from Sublessor; or, if Sublessee abandons or vacates the Premises during the Term; or, if Sublessee or any of its Affiliates, predecessors, or successors shall be in default of, or there shall have occurred an event of default under, any franchise agreement, development agreement (except for failure to meet the development schedule thereunder), asset purchase agreement, promissory note, guaranty, security agreement, any other lease or sublease or any other agreement entered into by any of them and Sublessor or any Affiliate, predecessor, or successor to Sublessor; or, if Sublessee is adjudicated bankrupt; or, if a permanent receiver, trustee,
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a sublessee can be in default of their sublease agreement under several circumstances, which could lead to termination of the sublease. These include failing to pay base rental or additional rent when due and not curing the default within five days of receiving written notice from the Sublessor.
Additionally, a Churchs Chicken sublessee defaults if they fail to perform any other terms or provisions of the Sublease or the Master Lease and do not cure the default within fifteen days after receiving written notice, unless the Master Lease specifies a shorter cure period. Abandoning or vacating the premises during the term of the sublease also constitutes a default.
Furthermore, a Churchs Chicken sublessee defaults if they, or any of their affiliates, predecessors, or successors, default under any franchise agreement, development agreement (with an exception for failing to meet the development schedule), asset purchase agreement, promissory note, guaranty, security agreement, any other lease or sublease, or any other agreement with the Sublessor or its affiliates, predecessors, or successors. Finally, being adjudicated bankrupt or having a permanent receiver or trustee appointed also constitutes a default. These defaults allow the Sublessor to pursue remedies, including those available to the Master Landlord under the Master Lease.