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  • Writer's pictureJacqueline Gorges

Drafting Contracts: The Chick-fil-A Lesson

By: Jacqueline Gorges, Senior Paralegal


contracts

In December 2023, the New York State Assembly introduced a bill (A08336) (https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A08336&term=2023&Summary=Y&Actions=Y&Memo=Y&Text=Y) to amend the public authorities law and chapter 154 of the laws of 1921, now requiring that “[a]ny contracts entered into for the operation of food services or food concessions at public transportation facilities owned or operated by the authority shall require that such services be provided every day of the week.” While this amendment is well within the rights of the New York legislature, what makes it newsworthy is the fact that Chick-fil-A is specifically mentioned as justification for submitting the bill, stating:

 

“Applegreen's portfolio of companies includes Chick-fil-A, which by company policy is closed on Sundays and which has already opened at seven service areas. While there is nothing objectionable about a fast food restaurant closing on a particular day of the week, service areas dedicated to travelers is an inappropriate location for such a restaurant. Publicly owned service areas should use their space to maximally benefit the public. Allowing for retail space to go unused one-seventh of the week or more is a disservice and unnecessary inconvenience to travelers who rely on these service areas.”

 

Although the news media jumped on the fact that the New York lawmakers singled out Chick-fil-A due to its company-wide policy of closing all locations on Sunday, crying breach of religious freedom, the reason for this bill is not quite so sinister. Rather, this bill is trying to fix a foreseeable but completely overlooked problem created by poor contract planning and drafting.

 

In 2021, the New York State Thruway Authority entered into a contract with Empire State Thruway Partners, owned by Applegreen Limited, an Ireland-based company, to redevelop New York’s 27 service areas. (https://www.thruway.ny.gov/news/pressrel/2021/07/2021-07-07-service-area-reconstruction.html)Under this agreement, Empire State Thruway Partners would pay for all construction costs and share a small percentage of sales in exchange for a 33-year lease of the rest stops. How could New York pass up such a great opportunity? New York taxpayers did not have to pay a penny, and all of the rest stops were to be renovated and/or knocked down and completely rebuilt. But here is where a small mistake can become a big headache…

 

In its excitement, New York failed to foresee the possibility that Applegreen could lease space to a company that was not open seven days per week – Chick-fil-A. Given that the purpose of a service area that is open 24/7 is to provide the advertised facilities 24/7, it seems counter-intuitive for a 24/7 service area to offer certain foods only 24/6. Everyone loses money that way. But that is exactly what Applegreen did, agreeing to lease 10 to Chick-fil-A at 10 of the 27 locations, and those unlucky enough to have to drive on Sundays have fewer options.

 

This whole debacle and debate could have easily been avoided if, during negotiations for the original contract between New York State and Empire State Thruway Partners, a clause was added requiring that any sub-leases require that the tenant operate 24/7/365. But hindsight is 20/20.

 

The Chick-fil-A Lesson

Although your next contract likely will not have the news media and lawmakers throughout the country trying to crucify you as anti-religious, it is important that you fully prepare your contract by making sure you understand the purpose of it and reviewing all possible consequences that your language, or lack thereof, could create. One small oversight could lead to a huge headache or lawsuit later on.


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For detailed insights and legal assistance on topics discussed in this post, including litigation, contact the Law Offices of Peter J. Lamont at our Bergen County Office. We're here to answer your questions and provide legal advice. Contact us at (201) 904-2211 or email us at  info@pjlesq.com.


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About Jacqueline Gorges,

Senior Paralegal

Jacqueline Gorges is the firm’s senior paralegal. She assists the firm’s attorneys with day-to-day tasks, drafting documents, and scheduling. Jacqueline is the first line of contact at the firm - answering client questions, updating clients on their matters - and ensuring that all client concerns are heard and responded to. She has been with the firm since 2017 but has worked as a paralegal since 2013.

Jacqueline holds a Bachelor’s Degree in Mathematics from the University of Illinois at Springfield and a Paralegal Certificate from Fairleigh Dickinson University. She is currently attending Mitchell Hamline School of Law.

 

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