How is 'Aggregate Base Operating Service Fee' defined for Chick Fil A franchisees?

According to Chick Fil A's 2025 Franchise Disclosure Document, the "Aggregate Base Operating Service Fee" for a calendar month is the sum of the Base Operating Service Fee for the month of all restaurants operated by the franchisee. The "Base Operating Service Fee" for a particular restaurant for each calendar month is the amount by which 15% of the Gross Receipts for the month exceeds the monthly equipment rental payable and business services fee for the calendar month. Chick-fil-A allocates a portion of the Base Operating Service Fee as a royalty for the sublicense of intellectual property.

In simpler terms, Chick Fil A franchisees pay a fee that is calculated from 15% of their restaurant's gross receipts, minus equipment rental and business service fees. The total of these fees from all restaurants the franchisee operates is the Aggregate Base Operating Service Fee. This fee covers royalties for the use of Chick Fil A's intellectual property.

Prospective franchisees should note that this fee, along with other fees, is paid to Chick Fil A from the Aggregate Operating Profit of the restaurants each month. The franchisee retains the Base Profit, Extra Profit, and any Aggregate Additional Profit exceeding Extra Profit, less any Extra Offsets. If the Aggregate Operating Profit is insufficient to cover all payments and retentions, disbursements are made in a specific order until the profit is exhausted.

Understanding the calculation and allocation of these fees is crucial for potential Chick Fil A franchisees to accurately project their earnings and manage their finances. The interplay between Gross Receipts, Operating Profit, and various fees and offsets determines the actual profit a franchisee can retain.