What is the Buns On Fire franchisee's obligation regarding the assignee's payment of the purchase price?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ix.) Franchisee shall enter into an agreement with the Franchisor agreeing to subordinate such assignee's, transferee's or purchaser's obligations to the Franchisor, including, without limitation, any Royalty Fees and Advertising Fees, and any obligations of such assignee, transferee or purchaser to make installment payments of the purchase price to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, a franchisee who is assigning their franchise agreement must enter into an agreement with Buns On Fire. This agreement ensures that the obligations of the assignee, transferee, or purchaser to Buns On Fire are prioritized.
Specifically, the franchisee must agree to subordinate the assignee's obligations to Buns On Fire. This subordination includes, but is not limited to, any Royalty Fees and Advertising Fees owed to Buns On Fire. It also extends to any obligations the assignee has to make installment payments of the purchase price to the franchisee.
In practical terms, this means that if a franchisee sells their Buns On Fire franchise and the new owner (assignee) owes both the original franchisee and Buns On Fire money, Buns On Fire gets paid first. This protects Buns On Fire's revenue stream and ensures that the franchisor's financial interests are secured during a transfer of ownership.