For a Chick Fil A franchise, what is the frequency of the payments and disbursements described in Section 14?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
Standards or otherwise comply with the terms and conditions hereof, which fines and costs incurred shall be paid to Chick-fil-A by the Operator as Chick-fil-A reasonably requires. Such fines and costs shall be in addition to any other rights or remedies Chick-fil-A may have.
SECTION 14 – CALCULATION AND PAYMENT OF FEES AND OTHER OPERATOR COSTS AND EXPENSES
PREAMBLE: By way of introduction to this Section 14, but without limiting the legal efficacy of Sections 14.1 through 14.13 in any way whatsoever, this Preamble generally describes the concept behind the calculation and payment mechanism set forth in this Section 14 for the Businesses. Generally, after the Operator pays the Businesses' operating costs and expenses out of the Operator's receipts from the operation of the Businesses, the Operator shall pay fees and make certain disbursements from the Operator's remaining receipts on a monthly basis as follows:
- (i) with respect to the Initial Business, the Operator retains or, as applicable, may pay
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, Section 14 generally describes the calculation and payment mechanism for the Businesses. After the Operator pays the Businesses' operating costs and expenses out of the Operator's receipts from the operation of the Businesses, the Operator shall pay fees and make certain disbursements from the Operator's remaining receipts on a monthly basis.
Specifically, with respect to the Initial Business, the Operator retains or, as applicable, may pay to the Operator-Owner a draw, disbursement or other distribution (as defined below, the "Base Profit") equal to One Thousand and No/100 Dollars ($1,000.00). The Operator also pays Chick-fil-A a Base Operating Service Fee for each Business which is equal to fifteen percent (15%) of such Business's Gross Receipts.
Chick-fil-A also has the option to administer a program for collecting the Operator's Gross Receipts and facilitating payments such as rent, equipment rental, insurance premiums, advertising contributions, and other amounts owed to Chick-fil-A and/or Suppliers. If the Operator fails to comply with the requirements of this program, Chick-fil-A may assess reasonable fines and costs against them.