In the event of damage or destruction to a Burger King location not exceeding $25,000, who is responsible for handling the insurance claim?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
ire thirty (30) days' notice by registered mail to Lessor of any cancellation or change affecting Lessor's coverage under the policies. All property damage and business interruption policies of Lessee shall contain a waiver of any subrogation rights which Lessee's
Lease/Sublease Exhibit G1 (03/2025) BK #_____
insurers may have against Lessor, even if the loss suffered is caused by the act, omission or negligence of Lessor.
§4.3 ADJUSTING: PROCEEDS. Claims for loss due to damage to the Premises under any policies provided for in this Lease shall be adjusted with the insurance companies:
- (a) by Lessee in the case of any particular casualty resulting in damage or destruction not exceeding $25,000, or
- (b) by Lessor and Lessee, in the case of any particular casualty resulting in damage or destruction exceeding $25,000 in the aggregate. Subject to the rights of any mortgagee, the proceeds of any insurance shall be payable as follows:
- (1) With respect to any loss not exceeding $25,000 in the aggregate, proceeds shall be paid to Lessee, who shall hold them in trust for the purpose of paying the costs of repair and restoration; and
- (2) With respect to losses exceeding $25,000 in the aggregate, the proceeds shall be paid to Lessor and shall be applied to pay the costs of repair and restoration.
§4.4 JOINT EFFORTS. Lessee and Lessor shall cooperate in attempts to collect any insurance proceeds that may be due in the event of loss, and Lessee shall execute and deli
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, the franchisee (Lessee) is responsible for adjusting insurance claims for damages not exceeding $25,000. For any single casualty event resulting in damages or destruction exceeding $25,000, Burger King (Lessor) and the franchisee will jointly adjust the insurance claim with the insurance companies.
For losses not exceeding $25,000, the insurance proceeds are paid to the franchisee, who must hold the funds in trust to cover the costs of repair and restoration. For losses exceeding $25,000, the insurance proceeds are paid to Burger King and applied to cover the costs of repair and restoration.
The franchisee and Burger King must cooperate to collect any insurance proceeds that may be due in the event of a loss. The franchisee is required to provide Burger King with any necessary proofs of loss and other documents required to recover these proceeds. The franchisee also agrees to seek indemnity for loss of property or business interruption solely from their own insurer and warrants that their insurers will have no rights against Burger King.