What obligations of the Buns On Fire franchisor survive the assignment of the Franchise Agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i.) Franchisor shall have the right, without the need for Franchisee's consent, to assign, transfer or sell its rights under this Agreement to any person, partnership, corporation or other legal entity provided that the transferee agrees in writing to assume all obligations undertaken by Franchisor herein and Franchisee receives a statement from both Franchisor and its transferee to that effect.
Upon such assignment and assumption, Franchisor shall be under no further obligation hereunder, except for accrued liabilities, if any.
Franchisee further agrees and affirms that Franchisor may go public; may engage in a private placement of some or all of its securities; may merge, acquire other corporations, or be acquired by another corporation; and/or may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring.
With regard to any of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or related to the loss of Franchisor's name, Marks (or any variation thereof) and System and/or the loss of association with or identification of Buns on Fire as Franchisor under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, if Buns On Fire assigns, transfers, or sells its rights under the Franchise Agreement, it must ensure the transferee agrees in writing to assume all of Buns On Fire's obligations. Once this assignment and assumption occur, Buns On Fire is relieved of further obligations under the agreement, except for any accrued liabilities. This means Buns On Fire remains responsible for any financial or contractual debts it incurred before the transfer.
This clause protects the franchisee by ensuring that a new franchisor takes on all the responsibilities outlined in the original agreement. However, Buns On Fire is no longer obligated under the agreement once the transfer occurs, except for any existing debts. This is a fairly standard practice in franchising, as it allows the franchisor to sell or transfer the business without remaining indefinitely liable for the actions of the new owner.
Buns On Fire also retains the right to go public, engage in private placements, merge with or acquire other corporations, or undergo financial restructuring. The franchisee waives any claims related to the loss of Buns On Fire's name, marks, or system resulting from these actions. This waiver is significant because it limits the franchisee's ability to sue for damages if the brand changes hands or the system is altered due to these corporate actions.