From whom are payments to Chick Fil A for the proprietary seasoned coater received?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
Chick-fil-A also has an interest in the proprietary seasoned coater used in the preparation of most Chick-fil-A brand chicken products. The seasoned coater is purchased by Chick-fil-A from the producer and is shipped directly to Chick-fil-A's authorized distributor(s). Payments to Chick-fil-A for the proprietary seasoned coater are received from the distributor(s) of the seasoned coater when the seasoned coater is purchased by the distributor(s) from Chick-fil-A. The distributor(s) then sells the seasoned coater to the Operators. Your cost for the seasoned coater depends on a pricing formula that includes a markup by Chick-fil-A that may change. Based upon the cost of ingredients to Chick-fil-A (including any freight charges paid to the producer) your cost will fluctuate.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 43–49)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, payments to Chick Fil A for the proprietary seasoned coater are received from the distributor(s) of the seasoned coater when the distributor(s) purchases the seasoned coater from Chick Fil A. The distributors then sell the seasoned coater to the Chick Fil A Operators (franchisees).
The cost for the seasoned coater depends on a pricing formula that includes a markup by Chick Fil A, which may change. The franchisee's cost will fluctuate based on the cost of ingredients to Chick Fil A, including any freight charges paid to the producer.
Chick Fil A and its affiliates are currently the only approved suppliers of the proprietary seasoned coater. In 2024, Chick Fil A's total consolidated revenues from Operator and Licensee purchases of the proprietary seasoned coater, business services and operating supplies, utensils, and promotional goods, and Operator leases of the premises, sublicenses of captive venue unit concession premises, sublicenses and subleases as applicable of delivery kitchen unit premises, subleases of food trucks, leases of marketing assets, equipment, furniture, and fixtures was $1,778,691,073, representing 19.63% of Chick Fil A's total consolidated revenues of $9,062,620,436.