factual

What costs are included in the indemnification obligations of a Burger King lessee, including specific examples?

Burger_King Franchise · 2025 FDD

Answer from 2025 FDD Document

f or as additional parking for its business on the Premises any property other than the Premises, except in accordance with the provisions of Article XIV of this Lease.

Except as may be otherwise specifically provided by the terms of this Lease or the Franchise Agreement, Lessor shall not be required to furnish to Lessee any facilities or services of any kind whatsoever, such as, but not limited to water, sewer, steam, heat, gas, hot water, electricity, light and power.

§5.2 REPAIRS AND MAINTENANCE. Lessee shall, at all times during the Term, at its own cost and expense, put, keep and maintain the Premises and all fixtures and personalty located on it in first-class order and condition, and subject to all applicable terms of Section 5.3 and Section 5.8, shall make all necessary and desirable repairs, restorations and replacements thereof, structural and nonstructural, foreseen or unforeseen (hereinafter collectively called "Repairs"), and shall use all reasonable precaution to prevent waste, damage or injury. Lessee shall also put, keep and maintain in good repair and free from dirt, snow, ice, rubbish and other obstructions or encumbrances, the sidewalks, parking areas, yards, plantings, gutters and curbs in front of and adjacent to the Building.

In the event that Lessee fails or neglects to make all necessary Repairs or fulfill its other obligations as set forth above, Lessor or its agents may enter the Premises for the purpose of making such Repairs or fulfilling those obligations. All costs and expenses incurred as a consequence of Lessor's action together with a service charge of fifteen percent (15%) thereof shall be repaid by Lessee to Lessor within fifteen (15) days after Lessee receives copies of receipts showing payment by Lessor for such Repairs or other obligations. These receipts shall be prima facie evidence of the payment of the charges paid by Lessor. Except in the case of emergency, Lessor shall give Lessee ten (10) days' notice before taking any such action. If Lessee fails to pay any such amounts due to Lessor under this Section 5.2, Lessor may add the same to Lessee's "Rent" and recover the same by all remedies available to Lessor for recovery of Rent in arrears.

§5.3 ALTERATIONS. Lessee agrees that it will at its own cost and expense make such reasonable alterations to the interior or exterior of the Premises as may reasonably be requested by Lessor from time to time in order to modify the appearance of the Building to reflect the then current image of BURGER KING restaurants.

Lessee shall not at any time make any alteration, change, addition or improvement (hereinafter collectively called "Alterations") in or to the interior or exterior of the Premises without the prior written consent of Lessor. In the event consent is given:

  • (a) the Alterations shall be performed in a first class workmanlike manner at Lessee's sole expense, and shall not weaken or impair the structural strength or lessen the value of the Premises, or change the purpose for which the Premises may be used;
  • (b) the Alterations shall be made according to plans and specifications therefor, which shall be first submitted to and approved in writing by Lessor;
  • (c) before the commencement of work on any Alterations, such plans and specifications shall be approved by all governmental authorities having jurisdiction and any public utility company having an interest in the Alterations;

  • (d) before the commencement of any Alterations, Lessee shall pay the amount of any increase in premiums on insurance policies for endorsements covering the risk during work on the Alterations and workmen's compensation insurance covering all persons employed in connection with that work;
  • (e) if the estimated cost of the Alteration exceeds $50,000.00, Lessee shall furnish to Lessor a surety bond of a company acceptable to Lessor, in an amount equal to the estimated cost of such work, or other security satisfactory to Lessor, guaranteeing the completion of such work, free and clear of all liens and encumbrances;
  • (f) the Alterations shall comply with (i) the requirements of Title III of the Americans With Disabilities Act of 1990 ("ADA") as same may be amended from time to time; (ii) the Americans With Disabilities Act Accessibility Guidelines 1991 ("ADAAG") as same may be amended from time to time which is a part of the ADA; (iii) the 2010 ADA Standards; and (iv) all state and local building codes including any disabilities related statutes or codes (collectively, the "Codes") in the applicable jurisdiction where the Premises are located;

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, a lessee has indemnification obligations related to repairs, maintenance, alterations and damage or destruction of the premises. If the lessee fails to make necessary repairs or fulfill other obligations, the lessor may enter the premises to make such repairs or fulfill those obligations. The lessee is responsible for repaying the lessor for all costs and expenses incurred as a consequence of the lessor's action, along with a service charge of fifteen percent (15%) of those costs.

Regarding alterations, the lessee is responsible for the cost and expense of reasonable alterations to the interior or exterior of the premises as requested by the lessor to reflect the current Burger King image. Any alterations, changes, additions, or improvements to the premises require the lessor's prior written consent and must be performed in a workmanlike manner at the lessee's sole expense. These alterations must not weaken the structural strength or lessen the value of the premises and must be made according to plans and specifications approved by the lessor and all relevant governmental authorities.

In the event of damage or destruction to the premises, the lessee is responsible for the prompt repair, replacement, and rebuilding of the premises at their own cost and expense. The restored property must reflect the current Burger King image and conform to the lessor's current design and specifications. The lessor is not obligated to cover these costs beyond any insurance proceeds received. The insurance proceeds will be used to pay or reimburse the lessee for the cost of restoration, including temporary repairs, with payments made as restoration progresses upon the lessee's written request and evidence of progress.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.