For a Chick Fil A franchise, what is the definition of 'Base Operating Service Fee'?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
5. Use/Occupancy Charge; Fees; and Payments.
- (a) Except as specifically provided for under the DK Lease and stated on the DK Summary attached as Exhibit A, Operator will pay to Chick-fil-A when due: (i) all required base operating service fees (the "BOSF") and additional operating service fees (the "AOSF") and other Operator costs and expenses on the Gross Receipts of the DK as provided for and calculated in accordance with Section 14 of the Franchise Agreement (the "BOSF and AOSF"); and (ii) all use and occupancy fees as set forth in the DK Summary and its attached Schedule A (the "Use/Occupancy Fee"); provided, however, if the DK Lease and DK Summary attached as Exhibit A so provide, the Operator agrees to directly make all payments to Licensor for Use/Occupancy of the DK Location(s) required under the DK Lease in the manner required (together with the Use/Occupancy Fee, collectively the "Use/Occupancy Charge").
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the operator is required to pay base operating service fees (BOSF) and additional operating service fees (AOSF) on the gross receipts of the Delivery Kitchen (DK). These fees are calculated as provided for in Section 14 of the Franchise Agreement. The operator must pay these fees when due, except as specifically provided for under the DK Lease and stated on the DK Summary attached as Exhibit A.
In the event that the operator does not pay the Base Operating Service Fees, the 'Service Fee Offsets' will increase by the amount of all Base Operating Service Fees that the operator does not pay to Chick-fil-A. The 'Service Fee Offsets' will decrease when the operator pays the previously unpaid Base Operating Service Fees to Chick-fil-A.
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. If the operator is past due on the payment of any amount due Chick-fil-A under the agreement, including Base Operating Service Fees, Chick-fil-A has the right to require the operator to pay interest on any such past due amount.