Is the initial franchise fee for a Chick Fil A franchise refundable?
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 attached as an exhibit to the Franchise Agreement. The additional franchise fee is considered fully earned and nonrefundable upon payment.
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 generally non-refundable. However, $5,000 of this fee is designated as a working capital deposit. This portion is maintained by Chick Fil A and may be refunded upon termination or non-renewal of the Franchise Agreement, after deducting any costs, expenses, and losses incurred by Chick Fil A due to the franchisee's operation. The reconciliation process occurs within approximately two and a half months after termination or non-renewal, following Chick Fil A's then-current restaurant close-out procedures.
Chick Fil A may offer franchisees the opportunity to operate additional Chick Fil A Restaurant businesses. In such cases, an additional franchise fee of $5,000 is required for each additional business. This additional fee is also considered fully earned and nonrefundable upon payment.
Beyond the working capital deposit, Chick Fil A states that it does not refund any initial fees except for the specific circumstance described within Item 5 of the FDD. This means that outside of the potential return of the working capital deposit after deducting costs upon termination or non-renewal, the initial franchise fee is non-refundable. This is a fairly standard practice in franchising, as the initial fee covers the franchisor's costs of granting the franchise and providing initial training and support.