When is the initial franchise fee of $10,000 due for a Chick Fil A franchise?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 5
INITIAL FEES
You must pay an initial franchise fee of $10,000 payable in full when you sign the Franchise Agreement whether for a traditional location or a captive venue unit. The initial franchise fee is considered fully earned and non-refundable upon payment, except that $5,000 of the initial franchise fee is deemed to be, and is maintained by Chick-fil-A as, an initial payment of working capital for the business(es) under the Franchise Agreement ("the working capital deposit"). You must always maintain the working capital deposit while you are a franchised Operator. Upon termination or non-renewal of your Franchise Agreement, Chickfil-A will conduct a final reconciliation and you will receive the working capital deposit funds, minus any costs, expenses and then known losses incurred by Chick-fil-A on account of your franchised Chick-fil-A Restaurant business or your operation of your franchised Chick-fil-A Restaurant business that you failed to pay or that you paid but should not have paid. This process will be conducted in a method and manner determined by Chick-fil-A under its then-current restaurant close-out procedures (currently, within two and one-half months after termination or non-renewal).
Chick-fil-A may, but is not obligated to, offer you a license to operate one or more additional Chickfil-A Restaurant businesses under your Franchise Agreement. You must pay an additional franchise fee of $5,000 for each additional Chick-fil-A Restaurant business, whether for a traditional location, a captive venue unit or a delivery kitchen unit, payable in full when you sign the Additional Business Amendment atta
Source: Item 5 — Initial Fees (FDD page 26)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the initial franchise fee of $10,000 is due in full when you sign the Franchise Agreement, whether for a traditional location or a captive venue unit. This fee is considered fully earned and non-refundable upon payment. However, $5,000 of this fee is designated as an initial payment of working capital, which Chick Fil A maintains as a working capital deposit.
This working capital deposit is held by Chick Fil A throughout the duration of the franchise agreement. Upon termination or non-renewal of the agreement, Chick Fil A will conduct a final reconciliation. The franchisee will then receive the working capital deposit funds back, minus any costs, expenses, and known losses incurred by Chick Fil A due to the franchisee's operation of the Chick Fil A Restaurant business that the franchisee failed to pay or should not have paid. This reconciliation process will be conducted according to Chick Fil A's then-current restaurant close-out procedures, which are currently completed within two and one-half months after termination or non-renewal.
Chick Fil A may offer franchisees the opportunity to operate additional Chick Fil A Restaurant businesses under the existing Franchise Agreement. For each additional restaurant, the franchisee must pay an additional franchise fee of $5,000. This fee is payable in full when the franchisee signs the Additional Business Amendment attached as an exhibit to the Franchise Agreement and is also considered fully earned and nonrefundable upon payment.