According to Chick Fil A, what are Level 2 inputs defined as?

According to Chick Fil A's 2025 Franchise Disclosure Document, Level 2 inputs are defined as observable inputs where the value of the fund(s) is the sum of the private investment funds held in the fund. This definition is part of a broader discussion on how Chick Fil A determines the fair market values of plan assets, which are categorized into three levels based on the inputs used for valuation.

Level 2 inputs are significant because they represent a valuation method that relies on observable data, providing a degree of transparency and verifiability. Unlike Level 1 inputs, which are based on unadjusted quoted prices in active markets, Level 2 inputs involve more complex calculations, such as summing the values of private investment funds. This implies that while the inputs are observable, they require some level of analysis and aggregation to arrive at a fair value.

For a prospective Chick Fil A franchisee, understanding these valuation levels might not directly impact day-to-day operations. However, it provides insight into how Chick Fil A manages and values its assets, particularly within investment funds. This can be relevant if the franchisee is interested in the financial stability and investment strategies of Chick Fil A as a company. Knowing that Level 2 valuations are based on observable inputs can offer some reassurance regarding the transparency and reliability of these valuations, compared to Level 3 inputs which rely on unobservable data and estimates.