Does the Churchs Chicken Sublease Agreement allow for extension periods?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Term. (a) Initial Term.
This Sublease shall commence on the Effective (the "Commencement Date") and expire on unless earlier terminated pursuant to the terms of this Sublease or the Master Lease (the "Initial Term"). (b) [OPTIONAL] Extension Period(s).
Sublessee shall have the option to extend the Term of this Sublease for up to ( ) separate option periods upon and subject to the terms set forth below in this Section 2(b).
The first extension period (the "First Extension Period") shall commence at the expiration of the Initial Term.
The second extension period (the "Second Extension Period") shall commence at the expiration of the First Extension Period.
The First Extension Period and the Second Extension Period are sometimes referred to herein collectively as the "Extension Periods" and individually as an "Extension Period".
Each Extension Period shall continue for a period of ( ) years from the commencement of such Extension Period.
Except as otherwise expressly provided herein, all of the terms and conditions of this Sublease applicable to the Initial Term shall continue to apply during each Extension Period.
Sublessee's right to extend this Sublease shall be conditioned on Sublessee not at the time being in default of this Sublease beyond any and all applicable notice and cure periods as of the commencement of the Extension Periods.
The Extension Periods shall be renewed Sublessee upon written notification of such election not later than twelve (12) months prior to the expiration of the Initial Term.
Initial Term and Extension Periods may be hereinafter referred to as "Term".
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Sublease Agreement does allow for optional extension periods. The agreement states that the sublessee has the option to extend the term of the sublease for up to a specified number of separate option periods, although the exact number of periods is not defined in the excerpt. These extensions are subject to the terms outlined in Section 2(b) of the sublease.
The first extension period commences upon the expiration of the initial term, and a second extension period begins after the first. Both are referred to as "Extension Periods." Each extension period continues for a specified number of years, which is not defined in the excerpt, from its commencement. The terms and conditions applicable during the initial term also apply during each extension period unless otherwise stated.
The sublessee's right to extend the sublease is conditional upon not being in default of the sublease terms at the time of commencement of the extension periods, beyond any applicable notice and cure periods. To renew the extension periods, the sublessee must provide written notification of their election at least twelve months before the initial term expires. The initial term and extension periods are collectively referred to as the "Term."
Prospective Churchs Chicken franchisees should note that the specific length of the extension periods and the total number of available extensions are not detailed in this excerpt. It is important to clarify these details with Churchs Chicken during the due diligence process to fully understand the potential long-term lease arrangements and obligations.