For a five-year Successor Franchise Agreement for a Non-Traditional Burger King Restaurant, when must the franchisee provide written notice of their intention to exercise the option?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- The introductory Section and subsections A. and E. of Section 17 of the Franchise Agreement are hereby deleted in their entirety and replaced by the following:
17. OPTION TO OBTAIN SUCCESSOR FRANCHISE AGREEMENT (select one): FRANCHISEE shall have, exercisable on the expiration date of the Term of this Agreement, an option to obtain a Successor Franchise Agreement ("Successor Franchise Agreement") for a Non-Traditional Restaurant for a term of Five (5) years, provided that: A. FRANCHISEE has given BKC written notice ("Notice") of its intention to exercise its Option to Obtain a Successor Franchise Agreement during the second (2nd) year prior to the expiration of the Term of this Agreement. E. FRANCHISEE shall execute the then current form of Successor Franchise Agreement for Non-Traditional Restaurants, which may differ as to Royalty and Advertising Contributions, as well as other terms and conditions. FRANCHISEE shall, upon execution of the Successor Franchise Agreement, pay to BKC the then current initial franchise fee.
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 franchisee seeking a five-year Successor Franchise Agreement for a Non-Traditional Burger King restaurant must provide written notice to Burger King of their intent to exercise this option during the second year prior to the expiration of the current agreement's term. This requirement is crucial for franchisees to secure their continued operation under the Burger King brand.
This notification period allows Burger King to assess the franchisee's compliance with the franchise agreement and to plan for the future of the restaurant location. It also provides the franchisee with sufficient time to prepare for the renewal process, which includes executing the current form of the Successor Franchise Agreement for Non-Traditional Restaurants and paying the then-current initial franchise fee. The terms and conditions of the successor agreement, including royalty and advertising contributions, may differ from the original agreement.
Failure to provide timely notice could result in the franchisee losing the opportunity to renew their franchise agreement, leading to termination of their operations. Therefore, it is essential for Burger King franchisees to mark their calendars and adhere to the notification deadline to ensure a smooth transition into a Successor Franchise Agreement.