When is the initial franchise fee for a Chick Fil A franchise due?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
pending.
Other than this action, no bankruptcy information is required to be disclosed in this Item.
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, regardless of whether it's 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 a working capital deposit, which Chick Fil A maintains for the duration of the franchise agreement.
This working capital deposit is essentially held by Chick Fil A and is intended to cover potential costs, expenses, or losses incurred by Chick Fil A due to the franchisee's operation. Upon termination or non-renewal of the Franchise Agreement, Chick Fil A will conduct a final reconciliation. The franchisee will then receive the working capital deposit back, minus any outstanding amounts owed to Chick Fil A. This reconciliation process is conducted according to Chick Fil A's restaurant close-out procedures, typically within two and a half months after termination or non-renewal.
Furthermore, if Chick Fil A offers the franchisee the opportunity to operate additional Chick Fil A Restaurant businesses, an additional franchise fee of $5,000 is required for each additional location. This fee is also payable in full when the franchisee signs the Additional Business Amendment to the Franchise Agreement and is considered fully earned and nonrefundable upon payment.