For a Chick Fil A franchise, what is specifically excluded from the calculation of 'Gross Receipts'?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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 exclude sales taxes levied upon retail sales that are payable to the appropriate governmental authority. The 'Gross Receipts' include all sales at, from, or related to the restaurant site during a calendar month, whether for cash or on a charge, credit, or time basis. This includes sales and services where orders originate and/or are accepted by the Operator at, in or away from the Site of such Business, or pursuant to telephone, internet, online or other similar orders received or filled at or in such Site.
This definition of 'Gross Receipts' is important because it forms the basis for calculating various payments and fees under the Franchise Agreement, including rent. By excluding sales taxes, Chick Fil A ensures that franchisees are not paying fees on money that is simply being passed through to the government. The inclusion of all other sales, regardless of origin or method of payment, provides a comprehensive base for calculating revenue-based payments.
For a prospective Chick Fil A franchisee, understanding this definition is crucial for financial planning and forecasting. It clarifies what revenue is subject to various fees and payments, allowing for more accurate budgeting. Franchisees should pay close attention to how 'Gross Receipts' are defined and calculated, as this will directly impact their profitability and obligations to Chick Fil A.