Can Buns On Fire require the assignee of a Buns On Fire franchise to execute the then-current Franchise Agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
- (viii.) Assignee, transferee, or purchaser shall, prior to any such assignment, pay to Franchisor a non-refundable transfer fee equal to fifty percent (50%) of the then-current Initial Franchise Fee to reimburse Franchisor for its legal and accounting fees, credit investigation, training expenses, and other charges and expenses in connection with such assignment, transfer or sale; and
- (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, the document does not explicitly state that Buns On Fire can require the assignee of a Buns On Fire franchise to execute the then-current Franchise Agreement. However, the FDD does state that the assignee, transferee, or purchaser must pay a non-refundable transfer fee equal to fifty percent (50%) of the then-current Initial Franchise Fee. This fee is to reimburse Buns On Fire for its legal and accounting fees, credit investigation, training expenses, and other charges and expenses in connection with such assignment, transfer, or sale.
Additionally, the franchisee must enter into an agreement with Buns On Fire agreeing to subordinate such assignee's, transferee's, or purchaser's obligations to Buns On Fire. This includes any Royalty Fees and Advertising Fees, and any obligations of such assignee, transferee, or purchaser to make installment payments of the purchase price to the franchisee.
While the FDD does not directly address the requirement for the assignee to sign the then-current Franchise Agreement, the stipulations regarding transfer fees and subordination agreements suggest that Buns On Fire maintains significant control over the transfer process and the assignee's obligations. A prospective franchisee should seek clarification from Buns On Fire regarding whether the assignee is required to sign a new agreement and what specific terms and conditions would apply in such a case.