For a Chick Fil A DK Location, how are fees and operating costs calculated and paid?

ase, as between Chick-fil-A and the Operator, all Gross Receipts generated as a result of sales from the Delivery Kitchen Unit, will be deemed to be Gross Receipts of the Operator, and the Operator (and not Chick-fil-A) will have sole responsibility for payment of any sales, use, or excise tax, any apportioned personal property tax or any other tax arising from the Delivery Kitchen Unit, the sale and distribution of Products and promotional items, the lease of the Equipment and/or the presence of the Equipment at the Delivery Kitchen Unit, directly or through Licensor. The parties acknowledge and agree that sales, use, or similar taxes may be due and payable even when Products and promotional items are given away and not sold.

• (d) Gross Receipts generated as a result of sales from the Delivery Kitchen Unit will be accounted for on a separate Fee Calculation Report ("FCR") for the Delivery Kitchen Unit. Except as specifically stated on the DK Summary attached as Exhibit A, the Fee Calculation Report will also reflect the calculation and payment of all fees and other operating costs and expenses related to the operation of the Delivery Kitchen Unit that are due and will be calculated under the terms of the Franchise Agreement. Chick-fil-A will have the right and Operator authorizes Chick-fil-A to account for the Gross Receipts, fees, operating costs, expenses and taxes incurred with respect to the Delivery Kitchen Unit and to make calculations and allocations to Operator's Businesses as may be required under the Franchise Agreement

and in order to effectuate the terms of the Franchise Agreement and this Agreement and to produce the Fee Calculation Report for each of Operator's Businesses.

• (e) The Operator understands and agrees that the Operator's obligation to furnish and send reports and records pursuant to Section 15.1 and Section 15.2 of the Franchise Agreement applies to the Delivery Kitchen Unit and includes all reports and records designated by Chick-fil-A that the Operator furnishes to or receives from Licensor. The Operator authorizes Chick-fil-A to request and receive any reports and records it designates relating to the Delivery Kitchen Unit directly from Licensor.
• (f) If any charge, fee, cost or expense which the Operator is obligated to pay pursuant to this Agreement or the DK Lease is initially billed to or paid by Chick-fil-A, Chick-fil-A will have the right to rebill the amount to the Operator. If Chick-fil-A rebills any amount to the Operator, the Operator will pay promptly the rebilled charge, fee, cost or expense directly to the appropriate business, governmental authority or other person or entity. If Chick-fil-A, at its election, pays any charge, fee, cost or expense on behalf of the Operator, the Operator will reimburse Chick-fil-A immediately upon the Operator's receipt of Chick-fil-A's written notice of having made the payment, in Chick-fil-A's sole and exclusive business judgment, either by (i) issuing Chick-fil-A a check or (ii) acknowledging and, to the extent required, approving Chick-fil-A's adjustments to the amounts owed by Chick-fil-A to the Operator or owed by the Operator to Chick-fil-A under the Franchise Agreement.
• (g) If the Operator fails to perform any of its obligations under this Agreement or under the DK Lease, Chick-fil-A, at its option, may (but is not required to) do the same or cause the same to be done, in addition to any and all other rights and remedies of Chick-fil-A. The cost incurred by Chick-fil-A in connection with such performance by Chick-fil-A will be an additional charge due from the Operator to Chick-fil-A, together with interest for the period beginning with the original due incurred 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 by law, then a rate equal to one and one-quarter percent (1.25%) per month. Interest will be calculated on the basis of monthly compounding and the actual number of days elapsed divided by 365. Interest will be in addition to any other rights or remedies Chick-fil-A may have under this Agreement.

6. Leased Equipment and Fee.

• (a) Subject to the provisions of the Franchise Agreement, this Agreement (including the DK Lease, the Equipment Lease Addendum and the DK Summary and their attached exhibits and schedules), Chick-fil-A will develop and equip the DK and deliver the Location to Operator for the Licensed Use under the terms and conditions of this Agreement and the DK Lease. Chick-fil-A will not be liable for any loss or damage to Operator due to a delay or failure to deliver the DK Location or any vehicle or equipment relating to the DK or the Licensed Use if the delay is the result of fire, act of God, destruction or damage, weather conditions, strike, labor dispute, delay in transportation, governmental requirements or any other cause beyond Chick-fil-A's reasonable control.

• (b) Pursuant to the terms and conditions of this Agreement and the Equipment Lease Addendum attached to this Agreement as Exhibit B as it may be amended from time to time, Chick-fil-A will lease to Operator and has delivered, or will deliver to the Site, the Equipment (as defined below) and other property described in the Equipment Lease Addendum solely for use in the operation of the Delivery Kitchen Unit. "Equipment" means the equipment and other property delivered, or to be delivered to the Site, by Chick-fil-A as described in the Equipment Lease Addendum together with any replacements of and additions or accessions to the original equipment.

• (c) In consideration of the lease of the Equipment, the Operator will pay to Chick-fil-A when due, the Equipment Fee stated in Exhibit B.

• 1. Default; Termination and Expiration.

Source: Item 23 — Receipts (FDD pages 103–600)