To whom are the fees payable under the Chick Fil A franchise agreement?

Notes:

• 1. These fees are imposed by Chick-fil-A and, except as expressly provided, are either (a) payable to Chick-fil-A, (b) payable to Chick-fil-A, as administrator, if determined by vote of Operators in your local or regional area, or (c) payable to the insurance company for premiums for workers' compensation, general liability, auto liability, and employment practices liability insurance coverages. All fees are non-refundable and are imposed uniformly except as expressly provided below.

1. If Chick-fil-A offers you a license to operate a Chick-fil-A Restaurant business under your Franchise Agreement as a captive venue unit, you will pay an occupancy charge to the premises owner or manager under the Concession Agreement. We currently estimate the occupancy charge will be between 4% to 30% of Gross Receipts of the captive venue unit, covering the charges for the right to occupy and use the premises (comparable to rent and any percentage rent), use of any owner/manager supplied equipment, owner/manager supplied services, and common area charges. The wide range of the estimated occupancy charge demonstrates that each captive venue unit opportunity is unique, and the economic terms of the particular Concession Agreement should be reviewed and evaluated carefully.

Between the first and fifteenth day of each month, Chick-fil-A prepares a fee calculation report for your franchised Chick-fil-A Restaurant business for the preceding month in order to determine the fees and other expenses to be paid from your Gross Receipts and, as part of the fee calculation process, calculates the fees and expenses according to the formula described in Note 2 above.

Although calculated and due on a monthly basis, these fees and expenses are paid from Gross Receipts as expenses of your franchised Chick-fil-A Restaurant business to Chick-fil-A on either a monthly or pro rata/month to date daily basis.

The expenses you pay to the insurance administrator related to the insurance premiums for workers' compensation, general liability, auto liability, and employment practices liability coverages are also reflected on the fee calculation report.

Under the Franchise Agreement, you appoint Chick-fil-A as your agent to establish and administer a program for collecting and accounting for the receipts of your franchised Chick-fil-A Restaurant business, and facilitating your payment of the rent, any equipment rental and any other payments or charges due pursuant to the Lease for the restaurant premises, as applicable certain of the insurance premiums elected by you or designated by Chick-fil-A, advertising contributions, any fees or charges pursuant to the Franchise Agreement, and other amounts owed to Chick-fil-A and/or suppliers by you.

With regard to the workers' compensation, general liability insurance, auto liability, and employment practices liability insurance program, you will get billed by and will pay the insurance program administrator.

Source: Item 6 — OTHER FEES (FDD pages 27–40)