How is the Base Operating Service Fee calculated for a Chick Fil A business?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) "Base Operating Service Fee" as to a particular Business for each calendar month during that portion of the Agreed Term of such Business following the Commencement Date of such Business means the amount by which fifteen percent (15%) of the Gross Receipts for such Business for such calendar month exceeds the Equipment Rental and the Business Services Fee for such Business payable by the Operator to Chick-fil-A for such calendar month;
(f) "Aggregate Base Operating Service Fee" for a calendar month means the sum of the Base Operating Service Fee for such month of all Businesses operated by the Operator;
(i) with respect to the Initial Business, the Operator retains or, as applicable, may pay to the Operator-Owner a draw, disbursement or other distribution (as defined below, the "Base Profit") equal to One Thousand and No/100 Dollars ($1,000.00);
(ii) the Operator pays Chick-fil-A a Base Operating Service Fee (as defined in Section 14.1(e) for each Business which is equal to fifteen percent (15%) of such Business's Gross Receipts (as defined below),
14.11 All payments to be made by the Operator to Chick-fil-A for any calendar month hereunder shall accrue on a daily basis and shall be due and payable at Atlanta, Georgia at such time and in such manner (including without limitation on a daily basis during the month of accrual through interbank transfers) determined by Chick-fil-A pursuant to Section 14.12 below. In the event that the Operator is past due on the payment of any amount due Chick-fil-A under this Agreement, including without limitation Base Operating Service Fees, Additional Operating Service Fees, rental amounts and accrued interest or on account of any Overdrawn Balance, Chick-fil-A shall have the right at its option to require the Operator, to the extent permitted by law, to pay interest on any such past due amount for the period beginning with the original due date for payment to the date of actual payment at an annual rate equal to the highest rate allowed by law or, if there is no maximum rate permitted
14.9 If the Aggregate Operating Profit for such calendar month is less than the Base Profit; then:
(b) the Operator shall pay Chickfil-A nothing;
(d) the Service Fee Offsets shall be increased by the Aggregate Base Operating Service Fee; and
(a) Pursuant to this Agreement and any then current policies that Chick-fil-A may establish from time to time, Chick-fil-A may, at the end of any calendar year during such time as the Agreed Term of any Business remains in effect hereunder, reduce the Base
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the Base Operating Service Fee is a key component of the financial relationship between the operator and Chick-fil-A. For each business, the Base Operating Service Fee is calculated monthly and is equivalent to 15% of the business's Gross Receipts, less any Equipment Rental fees and Business Services Fees. The Gross Receipts include all sales, whether cash or credit, originating from or related to the Chick Fil A location, including those from telephone, internet, or online orders.
The operator is responsible for paying this fee to Chick-fil-A from the Aggregate Operating Profit of the businesses. The Aggregate Base Operating Service Fee is the total of the Base Operating Service Fees for all businesses operated by the operator. The operator retains a Base Profit, which is $1,000 for the Initial Business, and may retain an Extra Profit as an advance on future profits. However, the operator does not have the right to retain a Base Profit with respect to any Additional Business.
There are specific conditions under which the Base Operating Service Fee may be affected. For example, Chick-fil-A may reduce the Base Operating Service Fee at the end of any calendar year if the Extra Profit retained by the operator exceeds the Aggregate Additional Profit. Conversely, if the Aggregate Operating Profit is less than the Base Profit, the operator will not pay Chick-fil-A anything, and the Service Fee Offsets will be increased by the Aggregate Base Operating Service Fee. These offsets are tracked and adjusted based on the operator's ability to cover retained profits and unpaid service fees with subsequent operating profits.
Payments for the Base Operating Service Fee accrue daily and are due in Atlanta, Georgia, with the specific payment method determined by Chick-fil-A. If an operator is late on any payments, including Base Operating Service Fees, Chick-fil-A has the right to charge interest on the past due amount at the highest rate allowed by law. This detailed calculation and payment structure ensures that Chick-fil-A receives its service fees while also allowing the operator to retain a base profit, with mechanisms in place to handle situations where profits fluctuate.