What is the condition for a Burger King franchisee to transfer the franchise grant?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) If Franchisee desires to transfer Franchisee's interest in any Participating Restaurant during the Term, Franchisee acknowledges and agrees that a condition to any such transfer shall be the party or parties acquiring such interest in the Participating Restaurant (collectively, the "Transferee") agreeing to participate in the Ad Fund FTF Program with respect to such Participating Restaurant. In furtherance of the foregoing, the Transferee shall enter into a Co-Investment Agreement in the form of this Agreement with respect to each Participating Restaurant being acquired by the Transferee concurrently with the execution by Transferee of the Franchise Agreement for such Participating Restaurant. Franchisee agrees that BKC may withhold its consent to any transfer of Franchisee's interest in any Participating Restaurant if the proposed Transferee does not enter into a Co-Investment Agreement in the form of this Agreement with respect to each Participating Restaurant acquired by the Transferee.
Source: Item 23 — RECEIPTS (FDD pages 127–995)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, if a franchisee desires to transfer their interest in any participating restaurant during the term of the agreement, the party acquiring the interest (the Transferee) must agree to participate in the Ad Fund FTF Program with respect to that restaurant. This requires the Transferee to enter into a Co-Investment Agreement, in the same form as the original agreement, concurrently with the execution of the Franchise Agreement for the restaurant. Burger King may withhold consent to the transfer if the Transferee does not agree to this Co-Investment Agreement.
This condition ensures that all Burger King restaurants contribute to the Ad Fund FTF Program, which likely supports advertising and marketing efforts. By requiring the Transferee to participate, Burger King maintains consistent funding for these programs across all its locations. This requirement could impact the attractiveness of the franchise to potential buyers, as they must be willing to commit to the Co-Investment Agreement.
For a prospective franchisee, this means that if they plan to sell their Burger King franchise in the future, they need to find a buyer who is willing to participate in the Ad Fund FTF Program and sign a Co-Investment Agreement. Failure to do so could prevent the sale from going through, as Burger King has the right to withhold consent. This condition is in place to protect the brand's marketing and advertising initiatives and ensure that all franchisees contribute to these efforts.