22 Substantial Fees Every Chick-fil-A Franchisee Needs to Know About (2024)

Detailed Information on Chick-fil-A’s Initial Franchise Fee, Royalty Fee + 20 Other Fees (Items 5 and 6, 2023 FDD)

1. Initial Franchise Fee: $10,000

• 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 satellite 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, Chick-fil-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).

2. Opening Inventory: $15,000 to $65,000

• Prior to the opening of your franchised Chick-fil-A Restaurant business, you must obtain almost all of the opening inventory of food products, ingredients, and supplies from an approved distributor. Chick-fil-A’s affiliate CFA Supply may be your distributor for all or some of these items if you are in a location CFA Supply services.

• If CFA Supply is your distributor, the payments you will make to CFA Supply for any of the opening inventory of food products, ingredients, and supplies are estimated to range from approximately $15,000 to $65,000, but will not be due until after your franchised Chick-fil-A Restaurant business opens.

3. Advertising: advertising fund contribution may vary (a) between 0% and 3.25%, to be determined by Chick-fil-A, as a percentage of Gross Receipts or (b) by vote of Operators in local or regional areas

• Due Date: Monthly.

• Since June 30, 1989, Chick-fil-A has not charged any amount for advertising (0% of Gross Receipts) as a matter of internal policy, which is subject to change.

• Operators within a geographic area may establish local or regional advertising fees which may also apply to Gross Receipts from satellite units and food trucks.

4. Advertising Support and Services Fee: advertising support and services fees incurred, if any, will vary based upon the support and services offered by Chick-fil-A, and selected and received by the Operator; the current in-house blended hourly rate for services is $100; Operator will pay any additional fees, costs, and expenses as applicable

• Due Date: As incurred.

• Chick-fil-A may offer to provide Operators with advertising support and services at the local, store, market, or regional advertising level on a formal basis through its in-house advertising agency as an alternative choice to Operators engaging a third-party advertising agency to provide such support and services.

• If offered and chosen, the amount of the fee will vary based upon the then-current rate card established by Chick-fil-A and the services selected by the Operator.

• Operator will pay any additional fees, costs, and expenses for print production, materials, and other related costs and expenses.

5. Additional Franchise Fee: $5,000 for each additional Chick-fil-A Restaurant business, whether for a traditional location or a satellite unit

• Due Date: If and when you sign an Additional Business Amendment.

• Chick-fil-A may, but is not obligated to, during the term of the Franchise Agreement, offer you a license to operate one or more additional Chick-fil-A Restaurant businesses under your Franchise Agreement.

• You and Chick-fil-A will sign an Additional Business Amendment in the form attached as an exhibit to the Franchise Agreement for each additional Chick-fil-A Restaurant.

6. Business Services Fee: $300

• Due Date: Monthly.

• Chick-fil-A may offer directly or indirectly through an approved third-party supplier, certain business services. If offered, you must use the services. Chick-fil-A will determine the fee for services it provides.

• You will pay for the cost and expense of your use of third-party business services, including costs rebilled or passed through to you by Chick-fil-A.

7. Rent (Traditional Unit): $2,550 to $85,500 (including, where applicable, percentage rent)

• Due Date: Monthly.

• Your lease payment will be based on the Lease, and any applicable prime lease or ground lease, for your franchised Chick-fil-A Restaurant business and will vary depending on where your franchised Chick-fil-A Restaurant business is located, the size of the premises, whether you are to operate a free-standing, mall, or in-line restaurant, and other factors.

• If Chick-fil-A owns the premises on which a free-standing Chick-fil-A Restaurant is operated, under the terms of the Lease, you will be a lessee of the premises and must comply with the obligations imposed by Chick-fil-A upon you as primary lessee of the premises. You will be required to make monthly payments to Chick-fil-A. The monthly payments will include all of the monthly base rent, percentage rent, and any other extra or additional charges and rents due under the Lease.

• If Chick-fil-A leases the premises on which a free-standing, mall, or in-line Chick-fil-A Restaurant is operated, under the terms of the Lease, you will be a sublessee of the premises and must comply with the obligations imposed on Chick-fil-A as the primary lessee of the premises and imposed by Chick-fil-A upon you as a sublessee. You will be required to make monthly payments to Chick-fil-A. The monthly payments will include all of the monthly base rent, percentage rent, and any other extra or additional charges and rents due under the Lease.

8. Occupancy Charge (Satellite Unit): determined under the Concession Agreement attached as an exhibit to the Concession Sublicense Agreement; currently estimated to range between 4% to 30% of Gross Receipts

• Due Date: Monthly, or other time period stated in the Concession Agreement.

9. Food Truck Usage Fee (Food Truck): currently $2,100 to $3,100, plus additional fees, costs, and expenses

• Due Date: Monthly.

• The food truck usage fee is payable to Chick-fil-A under the Food Truck License and Sublease Agreement in lieu of the lease rental payment due from Chick-fil-A to the third-party lessor under the third-party food truck lease.

• You will also pay directly or reimburse Chick-fil-A for any payments other than the lease rental payment due or payable under or on account of the food truck lease, including applicable mileage surcharge or pass-through costs, any sales, use, excise tax, apportioned personal property tax, or other applicable tax.

• You will reimburse any costs and expenses Chick-fil-A incurs to return any food truck to good order, condition, and repair.

10. Food Truck Insurance Fee (Food Truck): currently $250 to $450

• Due Date: Monthly.

• Payable to Chick-fil-A to cover the food truck and its contents and inventory, but not any Operator-owned contents or inventory.

11. Insurance: $240 to $12,000

• Due Date: Monthly.

12. Equipment Rental: currently, $750 to $5,000

• Due Date: Monthly.

• The equipment rental will be based on the fair market rental value as determined by Chick-fil-A in its sole and exclusive business judgment and varies depending on the type of restaurant location.

• The current equipment rental is:

• Free-Standing and In-Line: $5,000/month;
• Drive-Through only: $4,000/month;
• Mall: $3,000/month;
• Satellite: $750-$3,000/month.

• While specific items vary, the categories of equipment items leased typically include restaurant equipment, dining area furniture, and fixtures and other items. The categories of equipment items leased vary by type of unit. For example drive-thru only units, mall units, and satellite units typically would not require dining area furniture and fixtures.

• The equipment rental for a satellite unit could be less than the amount stated above for a satellite unit, including if the owner or manager of the premises provides certain equipment; or more, including if the venue is large.

• A food truck and its equipment is covered separately under the Food Truck License and Sublease Agreement.

13. Hardware and Software Support; High-Speed Internet Access: $9,500 to $20,000 (annually)

• Due Date: As incurred.

• The fees for a satellite unit may be less if Chick-fil-A’s services are reduced because the owner or manager of the premises provides a POS system with accompanying software that you must use.

14. Fines – Minimum Standards and Procedures: will vary under circ*mstances

• Due Date: As incurred.

• May be charged when you fail to maintain all applicable Minimum Standards or comply with the Franchise Agreement.

15. Indemnification: will vary under circ*mstances

• Due Date: As incurred.

• You must reimburse the franchisor if it is held liable for claims arising from the operation of your franchised Chick-fil-A Restaurant business or damage to the site.

16. Operating Service Fees: determined by formula

• Due Date: Monthly.

• “Base Operating Service Fee” for a particular restaurant for each calendar month is the amount by which 15% of the Gross Receipts for the month exceeds the monthly equipment rental payable and business services fee for the calendar month.

• “Additional Operating Service Fee” as to a particular restaurant for each calendar month is, in the case of the Initial Business (i.e. your first restaurant), 50% of the Net Profit for Initial Business for the month.

• “Net Profit for Initial Business” of the Initial Business for each calendar month is the difference between: (i) the Operating Profit for the month; and (ii) the sum of: [A] the Base Operating Service Fee for the month, [B] the Base Profit for the month, [C] the Base Profit Offsets, and [D] the Service Fee Offsets at the effective date of computation.

• “Operating Profit” for a particular restaurant for each calendar month is the amount by which Gross Receipts exceeds the ordinary and necessary expenses (as this term is reasonably determined by Chick-fil-A) incurred by you for the restaurant during the month.

• “Base Profit” for Initial Business for each calendar month is $1,000; you are not entitled to Base Profit with respect to any additional restaurant.

17. Credit Card, Gift Card, and Related Fees: will vary

• Due Date: As incurred.

• Pursuant to contracts negotiated by the franchisor on behalf of the Chick-fil-A system with various credit card, gift card, and processing vendors (including Chick-fil-A’s affiliate, CFA Servco), certain processing and other related fees are imposed by each vendor with respect to its particular card(s) based upon the credit card or gift card sales made by your Chick-fil-A Restaurant business.

• You may be required to enter into contracts directly with such credit card, gift card, and/or processing vendors.

• These fees vary under a wide degree of circ*mstances, and are nonrefundable.

18. Highway Signage: will vary under circ*mstances

• Due Date: As incurred.

• Actual fabrication cost plus annual expense for securing municipal highway signage opportunities, if available, for your Chick-fil-A Restaurant.

19. Interest on Late Payments: the maximum rate permitted by law, or if none, 1.25% per month

• Due Date: As incurred.

• Any payment or other amount owed the franchisor under the Franchise Agreement, including any attached Lease(s), Concession Sublicense Agreement for any satellite unit(s), or Food Truck License and Sublease Agreement, will bear interest, compounded monthly after the due date.

20. Cash Handling System Services: $85 to $450 (monthly)

• Due Date: As incurred.

• Pursuant to vendor contracts negotiated by the franchisor on behalf of the Chick-fil-A system, the franchisor will bill and collect certain fees and expenses that are charged by a vendor for cash handling system services provided each month by the vendor at your Chick-fil-A Restaurant business.

• You may be charged additional fees for non-warranty safe repairs; the amount will vary as incurred.

• You may not pay this fee to Chick-fil-A in certain circ*mstances, including when your Chick-fil-A Restaurant business is located in a mall, office building, or satellite location.

21. Reimbursem*nt of Cost of Performance: costs and expenses of performance

• Due Date: As incurred.

• If you fail to perform your obligations under the Lease, the Concession Sublicense Agreement for a satellite unit, or the Food Truck License and Sublease Agreement for a food truck, Chick-fil-A may perform and you will reimburse Chick-fil-A’s cost, together with interest.

22. Holdover Liquidated Damages: double the base rent and percentage rent

• Due Date: As incurred.

• If you holdover or remain in occupancy of the premises for a non-satellite location after your Lease terminates or expires, the base rent and percentage rent will double, as liquidated damages and not as a penalty, but payment will not waive Chick-fil-A’s other rights or remedies.

If you are looking for information on the estimated initial investment for a Chick-fil-A franchise, check out this post: Franchise Costs: Detailed Estimates of Chick-fil-A Franchise Costs