For a Chick Fil A franchise, what is the Agreed Term in relation to the calculation of Gross Receipts?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.1 In addition to all other terms which are defined in this Agreement, the following terms, when used in this Agreement, shall have the following respective meanings:
- (a) "Gross Receipts" as to a particular Business for each calendar month during that portion of the Agreed Term of such Business following the Commencement Date of such Business means the Operator's entire gross receipts with respect to such Business (excluding only sales taxes levied upon retail sales and payable over to the appropriate governmental authority) from all sales at, from or related to the Site of such Business during such calendar month, whether for cash or on a charge, credit or time basis, including but not
limited to such sales and services (i) where orders originate and/or are accepted by the Operator at, in or away from the Site of such Business, or (ii) pursuant to telephone, internet, online or other similar orders received or filled at or in such Site;
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, gross receipts for a Chick Fil A restaurant are calculated monthly during the Agreed Term of the business, starting from the Commencement Date. The Agreed Term is a key factor in determining the period over which Chick Fil A calculates the gross receipts for a specific business location.
Gross receipts include all sales at or related to the restaurant's site, whether the transactions are in cash, credit, or another payment method. This encompasses sales where orders originate or are accepted at the site, as well as those received via telephone, internet, or online. However, sales taxes levied upon retail sales and payable to the appropriate governmental authority are excluded from gross receipts.
For a prospective Chick Fil A franchisee, understanding the Agreed Term is crucial because it defines the duration over which gross receipts are assessed for fee calculation. This term directly impacts the franchisee's financial obligations to Chick Fil A, as fees and other operating costs are calculated based on these gross receipts. Franchisees should carefully review the Franchise Agreement to fully understand the implications of the Agreed Term on their financial responsibilities and profitability.