When is the first month's insurance expense due for a Chick Fil A restaurant?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure1 | Amount1 | Method of Payment | When Due | To Whom Payment Is to Be Made | |
|---|---|---|---|---|---|
| INITIAL EXPENDITURE | |||||
| Initial Franchise Fee | $10,000 2 | Lump Sum | At time of signing Franchise Agreement | Chick-fil-A | |
| ADDITIONAL EXPENDITURES | |||||
| Opening Inventory | $22,000 to $84,000 | As Incurred | As Incurred (but not due until after Restaurant opens) | Chick-fil-A, CFA Supply where applicable and Other Suppliers | |
| First Month’s Rental of Equipment | $750 to $5,000 | Monthly3 | By the 1st day of each month (but not due until after Restaurant opens) | Chick-fil-A | |
| First Month’s Lease/Sublease of Premises | $2,725 to $96,285 4 | Monthly3 | By the 1st day of each month (but not due until after Restaurant opens) | Chick-fil-A (see Item 11 below) | |
| First Month’s Insurance Expense | $260 to $10,2405 | Monthly3 | Determined by Chick-fil-A and/or Insurance Carrier (but not due until after Restaurant opens) | Chick-fil-A and/or Insurance Carrier | |
| Additional Funds | $391,000 to $2,134,000 4, 6 | As Incurred | As Incurred During First 3 Months of Operation | Chick-fil-A, CFA Supply where applicable, Insurance carrier, Employees, Utilities, Suppliers and other third parties | |
| TOTAL ESTIMATE OF INITIAL INVESTMENT | $426,735 to $2,339,525 1, 4 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT1 (FDD pages 41–43)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the first month's insurance expense, which ranges from $260 to $10,240, is determined by Chick-fil-A and/or the insurance carrier. This expense is not due until after the Chick Fil A restaurant opens.
Chick Fil A franchisees may be required to obtain certain insurance coverages either elected by them or designated by Chick Fil A, directly from Chick Fil A or through Chick Fil A's dedicated program administrator. For worker's compensation, general liability, auto liability, and employment practices liability insurance, franchisees will obtain coverage from a designated insurance carrier and will be billed by and pay the insurance administrator. Each month's premium payment will be 1/12th of the premium cost for the calendar year.
It is important to note that while these insurance amounts are calculated and due on a monthly basis, the fees and expenses are paid from Gross Receipts as expenses of the franchised Chick-fil-A Restaurant business to Chickfil-A on either a monthly or pro rata/month to date daily basis, except for the insurance premiums for workers' compensation, general liability, auto liability, and employment practices liability insurance coverages. This means that the franchisee will need to budget for these insurance costs as part of their ongoing operational expenses.