How is 'Net Profit for Additional Business' defined for a Chick Fil A franchise?

According to Chick Fil A's 2025 Franchise Disclosure Document, 'Net Profit for Additional Business' is specifically defined for each additional restaurant a franchisee operates, referred to as an 'Additional Business'. The 'Net Profit for Additional Business' for each calendar month is calculated by taking the Operating Profit for the Additional Business for that month and subtracting the Base Operating Service Fee for the Additional Business for the same month.

In simpler terms, this means Chick Fil A franchisees calculate the profit from each additional restaurant by deducting the service fees from the operating profit. The operating profit is the amount left after subtracting the ordinary and necessary expenses from the gross receipts. However, the definition of 'ordinary and necessary expenses' excludes items such as the franchisee's own compensation, excessive family member salaries, and the Base and Additional Operating Service Fees themselves.

This definition is important for Chick Fil A franchisees because it directly impacts how their profits are calculated and distributed. The Net Profit for Additional Business is used to determine the Additional Operating Service Fee and the Additional Profit, both of which are key components in the overall financial relationship between the franchisee and Chick Fil A. Understanding this definition is crucial for franchisees to accurately assess their financial performance and obligations.