What debts must be paid when transferring a Buns On Fire franchise?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
failed to cure such breach although obligated to do so. Franchisee shall not delay or withhold the payment of all or any part of the fees for any reason, put the same in escrow or set-off same against any and all claims or alleged claims Franchisee may allege against Franchisor.
5.9 Set Off Option
Franchisor may set off against any money owed by Franchisor or Franchisor's Affiliate(s) to Franchisee or Franchisee's Affiliate(s) pursuant to this Agreement or otherwise. This right to set off will continue until Franchisee has paid, satisfied or discharged all monies, debts or liabilities due or owing to Franchisor and Franchisor's Affiliates. Franchisee hereby irrevocably authorizes Franchisor or Franchisor's Affiliate to deduct from any monies payable by Franchisor or Franchisor's Affiliate to Franchisee or Franchisee's Affiliate(s) pursuant to this Agreement or otherwise any monies due or owing to Franchisor or Franchisor's Affiliates by Franchisee or Franchisee's Affiliate from time to time. If in Franchisee's jurisdiction set-off is not possible due to the local laws Franchisor or Franchisor's Affiliate(s) will hold
monies due to Franchisee or Franchisee's Affiliate as a lien, free from interest, until such time as Franchisee or Franchisee's Affiliate(s) have paid all monies owed by Franchisee or Franchisee's Affiliate to Franchisor or Franchisor's Affiliate(s).
ARTICLE VI TRAINING AND COMMENCEMENT OF BUSINESS
6.1 Initial Training Program
- (i.) Prior to opening the Franchised Business, at most two (2) managers, at least one of whom shall be a partner from the ownership group, shall attend Franchisor's initial training program, which shall be conducted at the Buns on Fire restaurant location that we designate as convenient for all parties, or at another location designated by Franchisor, and shall complete said training course to Franchisor's satisfaction. All training must be completed to Franchisor's satisfaction.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, before a franchise can be transferred, the franchisee must pay all outstanding monies, debts, or liabilities owed to Buns On Fire and its affiliates. This includes any money owed under the Franchise Agreement or any other agreement.
Buns On Fire has the right to offset any money it or its affiliates owe the franchisee against the debts the franchisee owes them. This right continues until all debts are settled. The franchisee authorizes Buns On Fire to deduct any monies owed from any payments due to the franchisee. If set-off is not possible due to local laws, Buns On Fire will hold the monies due to the franchisee as a lien until all debts are paid.
In addition to settling outstanding debts, the assignee, transferee, or purchaser must pay Buns On Fire a non-refundable transfer fee equal to 50% of the then-current Initial Franchise Fee. This fee reimburses Buns On Fire for its legal and accounting fees, credit investigation, training expenses, and other costs associated with the transfer. The franchisee must also enter into an agreement subordinating the assignee's, transferee's, or purchaser's obligations to Buns On Fire, including Royalty Fees, Advertising Fees, and installment payments of the purchase price to the franchisee.
In Washington state, transfer fees are collectable to the extent that they reflect Buns On Fire's reasonable estimated or actual costs in effecting a transfer.