What deductions are subtracted from the Chick Fil A Base Operating Service Fee?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.10 The Operator agrees to pay to Chick-fil-A when due all required payments under this Agreement and any attached Lease(s) and as applicable Concession Sublicense Agreement(s) for any Captive Venue Unit(s) and Delivery Kitchen Agreement for any Delivery Kitchen Unit(s), including without limitation the payments set forth in this Section 14.
- (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
Operating Service Fee for such calendar year by the amount that the Extra Profit retained by the Operator for such year exceeds and is not covered by the Aggregate Additional Profit as of the end of such applicable calendar year.
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 can be reduced under specific conditions. Chick-fil-A may reduce the Base Operating Service Fee for a calendar year by the amount that the Extra Profit retained by the Operator for such year exceeds and is not covered by the Aggregate Additional Profit as of the end of such applicable calendar year.
In simpler terms, if a Chick Fil A operator retains more Extra Profit than is covered by the Aggregate Additional Profit at the end of the year, Chick-fil-A might reduce the Base Operating Service Fee by that excess amount. This adjustment is made at the end of the calendar year and is subject to Chick-fil-A's policies in effect at that time.
This provision offers a potential benefit to Chick Fil A operators, as it allows for a reduction in fees under certain profit conditions. However, it's important to note that this is not a guaranteed reduction, and it depends on the specific financial performance of the franchise and Chick-fil-A's prevailing policies. Franchisees should carefully monitor their profits and consult with Chick-fil-A to understand how this provision might apply to their individual circumstances.