According to the Burger King FDD, what constitutes an 'Affiliate'?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
As used herein, "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, governmental authority, statutory organization or other entity. As used herein, "Control" or "Controlled" means the direct or indirect ownership, whether by ownership of securities, contract, proxy or otherwise, of shareholding or contractual rights of a Person that assures (i) the majority of the votes in the resolutions of such Person, (ii) the power to appoint the majority of the managers or directors of such Person, or (iii) the power to direct or cause the direction of the management or policies of such Person, and the related terms "Controlled by" "Controlling" or "under common Control with" shall be read accordingly. As used herein, "Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with the Person specified.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, an 'Affiliate' is defined in relation to a 'Person.' The FDD specifies that an 'Affiliate' means another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with the Person specified. This definition is crucial for prospective franchisees as it broadens the scope of responsibility and potential liability beyond just the franchisee themselves.
The term 'Person' is also defined within the FDD as any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, governmental authority, statutory organization or other entity. This inclusive definition ensures that the concept of an 'Affiliate' can extend to various types of entities or individuals connected to the franchisee.
'Control' is further defined as the direct or indirect ownership, whether by ownership of securities, contract, proxy or otherwise, of shareholding or contractual rights of a Person that assures (i) the majority of the votes in the resolutions of such Person, (ii) the power to appoint the majority of the managers or directors of such Person, or (iii) the power to direct or cause the direction of the management or policies of such Person. This definition of 'Control' is important because it clarifies the degree of influence or authority that must exist for one entity to be considered an affiliate of another. For a Burger King franchisee, this means that the actions and performance of any entity or individual that controls, is controlled by, or is under common control with them can impact their franchise agreement and operations.