What is the deadline for the Churchs Chicken Sublessee to provide a Termination Notice to the Sublessor after a Casualty?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if the building comprising the Premises is damaged or destroyed during the last lease year of the then Term, including any Extension Period, and the cost of restoring such damage or destruction exceeds fifty percent (50%) of the then replacement value of the building, fixtures and improvements comprising the Premises, as reasonably determined by Sublessor, exclusive of the cost of the foundation, and an Event of Default shall not have occurred and be continuing, then Sublessee shall have the right to terminate this Sublease by giving notice of such termination ("Termination Notice") to Sublessor within thirty (30) days after the occurrence of such Casualty, in which event this Lease shall be deemed terminated effective as of the later of the date (i) such Termination Notice is delivered to Sublessor, (ii) Sublessee vacates the Premises following such
Casualty, and (iii) Sublessor receives all proceeds of any insurance payable with respect to such Casualty and Sublessee has paid to Sublessor an amount equal to the insurance deductible applicable to such Casualty and the cost of restoration resulting from such Casualty which was not covered by insurance. If this Sublease is terminated pursuant to this subsection, Rent and all other charges and costs payable hereunder shall be adjusted and paid to the effective date of termination. Such termination shall not limit Sublessee's obligations under this Sublease arising or accruing prior to the effective date of such termination and/or which by the terms of this Sublease survive such termination. Notwithstanding the foregoing, in the event of a casualty during the last lease year of the Term of this Sublease at a time when there are unexercised renewal options in favor of Sublessee, and if Sublessee gives written notice to Sublessor of Sublessee's election to exercise the next available renewal option within thirty (30) days after the date of occurrence of such casualty, then such casualty shall be deemed not to have occurred during the last year of the Term of this Sublease, and the provisions of Section 13.3 above shall of applicable.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a Churchs Chicken sublessee has the right to terminate the sublease if the building comprising the premises is damaged or destroyed during the last lease year (including any extension period). For this to apply, the cost of restoring the damage must exceed 50% of the replacement value of the building, fixtures, and improvements, excluding the foundation cost, as reasonably determined by the sublessor. Additionally, an Event of Default must not have occurred and be continuing.
To exercise this termination right, the Churchs Chicken sublessee must provide a Termination Notice to the sublessor within thirty (30) days after the occurrence of the casualty. If the sublessee provides this notice within the specified timeframe, the lease will be deemed terminated. The termination is effective as of the later of three dates: (i) when the Termination Notice is delivered to the sublessor, (ii) when the sublessee vacates the premises following the casualty, and (iii) when the sublessor receives all insurance proceeds related to the casualty, and the sublessee has paid the insurance deductible and any uncovered restoration costs.
Upon termination, rent and other charges will be adjusted and paid up to the termination date. However, the sublessee remains responsible for obligations arising before the termination date and those that survive termination according to the sublease terms. If a casualty occurs during the last lease year and the sublessee has unexercised renewal options, the sublessee can prevent the casualty from triggering the termination clause by exercising the next available renewal option within thirty (30) days of the casualty. In this case, the standard restoration obligations would apply.