Under what conditions can the Master Landlord terminate the Churchs Chicken Sublease agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the occurrence of any such event of default, Sublessor, in addition to any other remedies available to Sublessor at law or in equity or elsewhere hereunder, shall have the right to pursue any of the remedies afforded the Master Landlord under the Master Lease.
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- Default by Sublessor. In the event of Default under the Master Lease, Master Landlord may elect, in its sole discretion to either (i) accept the terms of the Sublease as a lease between Master Landlord and Sublessee, or (ii) terminate the Sublease, whereby Sublessee shall agree to attorn to Master Landlord by executing a new lease for the then-remaining Term of the Sublease, with all extension options and other right and options set forth therein, and otherwise on terms that integrate, in Master Landlord's reasonable discretion, the terms of the Individual Lease Agreement and the terms of the Supplemental Agreement (and that omit any reference to, or use of, the Replacement Options Letter), such that (a) all of the contractor's obligations under the Supplemental Agreement with respect to the applicable Subleased Premises become the Sublessee's obligations under such lease, (b) Master Landlord is relieved of all such obligations in the lease, and (c) base rent under such new lease is reasonably determined by Master Landlord based on the MAI fair market rental value appraisal of the applicable Subleased Premises, obtained by Master Landlord at Sublessee's expense.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, the Master Landlord has specific rights in the event of a default by the Sublessor (Cajun Realty LLC). If Cajun Realty LLC defaults on the Master Lease, the Master Landlord has the option to either accept the terms of the Sublease as a direct lease agreement between the Master Landlord and the Churchs Chicken franchisee (Sublessee) or terminate the Sublease entirely.
If the Master Landlord chooses to terminate the Sublease, the Churchs Chicken franchisee must agree to a new lease with the Master Landlord. This new lease would cover the remaining term of the original Sublease, including any extension options. The terms of this new lease would integrate the terms of the Individual Lease Agreement and any Supplemental Agreement, as reasonably determined by the Master Landlord. This means the franchisee would assume the contractor's obligations under the Supplemental Agreement, and the Master Landlord would be relieved of those obligations. The base rent for this new lease would be based on a fair market rental value appraisal of the subleased premises, obtained by the Master Landlord at the franchisee's expense.
This clause protects the Master Landlord's interests in the event the Sublessor fails to meet its obligations under the Master Lease. For a prospective Churchs Chicken franchisee, this means that the continuation of their restaurant at the location is contingent on the financial health and compliance of Cajun Realty LLC with the Master Lease. If Cajun Realty LLC defaults, the franchisee could face either a new lease agreement with potentially different terms or the termination of their sublease, which could force them to relocate their Churchs Chicken restaurant.