How does the location of a Chick Fil A restaurant affect the initial investment?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
ility, and employment practices liability insurance coverages. See Item 5 and Note 2 and Note 3 to the table in Item 6 and Note 5 below.
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- These amounts depend on where your franchised Chick-fil-A Restaurant business will be located, the size of the premises, traditional location, captive venue unit or delivery kitchen unit and other factors. The amount could be higher, for example, if your franchised Chick-fil-A Restaurant business will be located in a flagship-type, urban facility in a large metropolitan market. If you operate a captive venue unit in a non-traditional location or a delivery kitchen unit, you will pay, respectively, an occupancy charge or use/occupancy charge or fee instead of rent. We currently estimate the occupancy charge will range between 4% to 30% of Gross Receipts. The equipment rental for a captive venue unit or delivery kitchen unit could be less than the amount stated above for a captive venue unit or delivery kitchen unit, including if the owner, licensor or manager of the premises provides certain equipment, or more including if the venue is large.
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- As applicable you must obtain certain of the insurance coverages elected by you or designated by Chick-fil-A, from Chick-fil-A or through Chick-fil-A's dedicated program administrator. With regard to the worker's compensation, general liability, auto liability, and employment practices liability insurance program, (i) you will obtain these coverages from the designated insurance carrier, (ii) will get billed by and will pay the insurance administrator, and (iii) as each month's premium payment will pay 1/12th of the premium cost for the calendar year. These amounts will not be due until after your franchised Chick-fil-A Restaurant business opens.
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- This amount reflects the costs you can expect to pay in your first three months of operation and includes your expenses, as well as the cost of repairs, maintenance and utilities, but does not include any draws, disbursements or other distributions taken by you. In formulating these figures, Chickfil-A has relied on its over 50 years of experience in the Chick-fil-A Restaurant business and on the financial performance of franchised Chick-fil-A Restaurants and company-operated Chick-fil-
A Restaurants opened during the fiscal year ended December 31, 2024. The exact amount required for additional funds will vary from operation to operation and cannot be estimated with certainty for your franchised Chick-fil-A Restaurant business.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT1 (FDD pages 41–43)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the location of the restaurant significantly impacts the initial investment required. The FDD specifies that costs depend on where the franchised Chick-fil-A Restaurant business will be located, the size of the premises, and whether it is a traditional location, captive venue unit, or delivery kitchen unit. For example, a flagship-type, urban facility in a large metropolitan market could result in higher costs.
The type of unit also affects the initial investment. The initial investment for captive venue units and delivery kitchen units varies from other types of units due to factors such as seasonal operations, unique operating hours, limited access to sell to the public, varied spaces, and varied landlord-supplied equipment packages. The initial investment for either a captive venue unit or a delivery kitchen unit is estimated to fit under the high range of certain of the estimated costs and is estimated to be less than the low range for certain of the estimated costs.
Item 7 outlines the estimated initial investment, showing a range of $426,735 to $2,339,525. This total includes expenses such as the initial franchise fee of $10,000, opening inventory ranging from $22,000 to $84,000, first month’s rental of equipment from $750 to $5,000, first month’s lease/sublease of premises from $2,725 to $96,285, first month’s insurance expense from $260 to $10,240, and additional funds ranging from $391,000 to $2,134,000. These additional funds cover the first three months of operation and include expenses, repairs, maintenance, and utilities, but not any draws or distributions taken by the franchisee. The document indicates that the exact amount required for additional funds will vary from operation to operation and cannot be estimated with certainty.