How does Chick Fil A calculate incentive compensation for participating full-time employees?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
| ------------------------- | -- | -- | -- |
|---|
| | Weighted Average | | Unamortized Deferred | | | | |--------------------|---------------------|---------------------|-------------------------|----------------------------------------|--|--| | | Interest Rate | Outstanding | Issuance Costs | | | | | Senior Notes | 1.86% | $ 1,500,000,000 | $ 2,158,746 | Carrying Amount $ 1,497,841,254 | | | | Related Party Note | 4.75% | 660,126,120 | — | 660,126,120 | | | | Term Loan | 6.01% | 195,000,000 | 212,292 | 194,787,708 | | | | Total | | $ 2,355,126,120 | $ 2,371,038 | $ 2,352,755,082 | | | The following table summarizes the principal amounts due under our outstanding notes payable as of December 31, 2024:
| Year | Total |
|---|---|
| 2025 | $ 236,394,757 |
| 2026 | 392,433,426 |
| 2027 | 723,522,519 |
| 2028 | 224,661,894 |
| 2029 | 475,861,767 |
| Thereafter | 1,021,850,052 |
| Total notes payable outstanding | 3,074,724,415 |
| Unamortized deferred issuance costs | 4,425,586 |
| Carrying amount of notes payable | $ 3,070,298,829 |
6. Employee Benefit Plans
The Company has a qualified contributory profit sharing plan covering substantially all employees. The Company matches dollar-for-dollar up to 5% of eligible compensation contributed by each employee. The Company recorded contribution expense of approximately $48,105,000, $37,637,000, and $28,377,000, during the years ended December 31, 2024, 2023 and 2022, respectively, reflected within Selling, general and administrative expenses in the accompanying consolidated statements of comprehensive earnings.
The Company also has a qualified defined benefit pension plan covering certain eligible employees. As part of the acquisition of Dwarf House Group during 2024, the Company also acquired a defined benefit pension plan for employees of DHG which is now included in Chick-fil-A's existing plan as of the date of acquisition. The plan provides a defined benefit based on years of service and highest average compensation during a f
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
Based on the 2025 Chick Fil A Franchise Disclosure Document, the specifics of incentive compensation for full-time employees are not detailed. However, the document does mention a qualified contributory profit sharing plan. Chick Fil A matches dollar-for-dollar up to 5% of eligible compensation contributed by each employee. In 2024, 2023, and 2022, Chick Fil A recorded contribution expenses of approximately $48,105,000, $37,637,000, and $28,377,000, respectively. These expenses are reflected within selling, general, and administrative expenses in the consolidated statements of comprehensive earnings.
Chick Fil A also maintains a qualified defined benefit pension plan covering certain eligible employees, including one acquired through the Dwarf House Group acquisition in 2024. This plan provides benefits based on years of service and the highest average compensation during a five-year period, including an early retirement provision for participants retiring after age 55 with 20 years of service. As of December 31, 2024 and 2023, this plan had underfunded balances of approximately $202,464,000 and $117,050,000, respectively.
In 2024, Chick Fil A introduced a non-qualified pension plan for certain senior management members. This plan calculates benefits upon termination based on annual compensation from the most recent full calendar year before termination, subject to plan document limits. As of December 31, 2024, this non-qualified plan had an underfunded balance of approximately $130,629,000. Further details on specific incentive structures and eligibility criteria for employees would need to be clarified directly with Chick Fil A.