What actions related to bankruptcy or insolvency by a Burger King developer, its affiliates, or principals can lead to termination of the agreement?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.1.5 if Developer, any of its Affiliates or any Principal seeks any type of relief under the provisions of a bankruptcy or insolvency law; or if there is an arrangement among the creditors of Developer, any of its Affiliates or any Principal; or any Person files a petition or application seeking to have Developer, any of its Affiliates or any Principal adjudicated bankrupt and the action is not dismissed within 30 days after it is filed; or Developer, any of its Affiliates or any Principal admits in writing or upon sworn oath the inability to pay any debts as they fall due; or a receiver or other administrator (permanent or temporary) is appointed over all or any of the assets of Developer, any of its Affiliates or any Principal; or any administrator
or liquidator is appointed over Developer, any of its Affiliates or any Principal by any competent bankruptcy court or under any other law or authority including under an order for a suspension of proceedings or Developer, any of its Affiliates or any Principal takes any action to liquidate; or wind up;
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, several actions related to bankruptcy or insolvency of the developer, its affiliates, or principals can lead to the termination of the development agreement. Specifically, if the developer, any of its affiliates, or any principal seeks any type of relief under bankruptcy or insolvency law, this can trigger termination. Similarly, if there is an arrangement among the creditors of the developer, its affiliates, or any principal, it may lead to termination.
Furthermore, if a person files a petition or application seeking to have the developer, any of its affiliates, or any principal adjudicated bankrupt, and the action is not dismissed within 30 days, Burger King may terminate the agreement. An admission in writing or under oath by the developer, its affiliates, or any principal of their inability to pay debts as they fall due can also result in termination.
Finally, the appointment of a receiver or other administrator over the assets of the developer, its affiliates, or any principal, or the appointment of an administrator or liquidator by a competent bankruptcy court, can lead to termination. Any action taken by the developer, its affiliates, or any principal to liquidate or wind up their affairs also constitutes grounds for termination by Burger King. However, an amendment to the Burger King franchise agreement for California states that the provision providing for termination upon bankruptcy may not be enforceable under federal bankruptcy law.