How is the 'Base Operating Service Fee' calculated for a Chick Fil A restaurant?

According to Chick Fil A's 2025 Franchise Disclosure Document, the Base Operating Service Fee for each restaurant is calculated monthly. It is the amount by which 15% of the Gross Receipts for the month exceeds the total of the monthly equipment rental payable and the business services fee for that calendar month. Chick-fil-A allocates a portion of this fee as a royalty for the sublicense of intellectual property. 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.

Gross Receipts are defined as the entire gross receipts from sales (excluding sales tax) with respect to the restaurant, including any associated food truck, captive venue, or delivery kitchen unit that is an additional Chick-fil-A Restaurant business and is accounted for as a separate restaurant. Operating Profit for a particular restaurant for each calendar month is the amount by which Gross Receipts exceeds the ordinary and necessary expenses (as this term is reasonably determined by Chick-fil-A) incurred by you for the restaurant during the month. However, the ordinary and necessary expenses do not include any amount the franchisee pays to themselves as compensation for services, any salary paid to any member of the franchisee's family to the extent the salary exceeds normal wages for similar work, and the Base Operating Service Fee and the Additional Operating Service Fee.

Prospective Chick Fil A franchisees should note that the percentages used in computing payments based on Gross Receipts have been determined by Chick-fil-A in consideration of the set of rights being granted by Chick-fil-A, the drawing power of a Chick-fil-A Restaurant, the value of the Chick-fil-A system as a whole, the ratio between Chick-fil-A's investment and the franchisee's investment, potential rates of return on investment, the ratio between what Chick-fil-A thinks might be its potential return and the franchisee's, the amount which Chick-fil-A has at risk, and Chick-fil-A's interests in obtaining a profit in light of competitive conditions. The percentages may vary among Operators depending upon when a franchise or site was obtained or leased as well as other factors. In unusual circumstances which include special costs, the fees paid by the franchisee may be higher than those outlined in Item 6 of the FDD.

It's important for potential franchisees to understand how these fees are calculated, as they directly impact the profitability of the Chick Fil A restaurant. The franchisee pays Chick-fil-A from the Aggregate Operating Profit of the restaurants for each calendar month, an amount equal to the sum of the Aggregate Base Operating Service Fee and the Aggregate Additional Operating Service Fee, and retain for themselves an amount equal to the sum of the Base Profit, Extra Profit and any Aggregate Additional Profit in excess of Extra Profit, less any Extra Offsets (not to exceed the Aggregate Additional Profit for the month). To the extent that the franchisee's Aggregate Operating Profit for a month is not sufficient to fund all of these payment and retention items, the franchisee must disburse their Aggregate Operating Profit in a specific order, until it is exhausted.