How does the cost of the seasoned coater fluctuate for Chick Fil A Operators?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
Chick-fil-A also has an interest in the proprietary seasoned coater used in the preparation of most Chick-fil-A brand chicken products. The seasoned coater is purchased by Chick-fil-A from the producer and is shipped directly to Chick-fil-A's authorized distributor(s). Payments to Chick-fil-A for the proprietary seasoned coater are received from the distributor(s) of the seasoned coater when the seasoned coater is purchased by the distributor(s) from Chick-fil-A. The distributor(s) then sells the seasoned coater to the Operators. Your cost for the seasoned coater depends on a pricing formula that includes a markup by Chick-fil-A that may change. Based upon the cost of ingredients to Chick-fil-A (including any freight charges paid to the producer) your cost will fluctuate.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 43–49)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the cost of the seasoned coater for Operators is subject to change based on a pricing formula that includes a markup by Chick Fil A. This markup is not fixed and can be adjusted by Chick Fil A. The cost of ingredients to Chick Fil A, including any freight charges paid to the producer, directly impacts the price that Operators will pay for the seasoned coater. Therefore, if the cost of ingredients or freight increases, the Operator's cost for the seasoned coater will also increase.
This means that Chick Fil A Operators need to be aware that their expenses for the seasoned coater can vary over time due to factors outside of their direct control. These fluctuations are tied to the ingredient costs and freight charges incurred by Chick Fil A, as well as any changes Chick Fil A makes to its markup. This variability introduces an element of uncertainty in budgeting and financial planning for the franchise.
For a prospective Chick Fil A franchisee, it is important to understand the potential impact of these cost fluctuations on their profitability. While Chick Fil A sets the standards and manages the supply chain, Operators bear the risk of increased costs for essential supplies like the seasoned coater. Therefore, franchisees should carefully consider these potential cost variations when evaluating the financial viability of the franchise and planning their operational budget.