For a Burger King franchise, when are royalties due, and on what are they based?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
The following paragraphs replace Section 9.A of the Agreement: During the Term of this Agreement, Franchisee agrees to pay to BKC, for the use of the BURGER KING System and the BURGER KING Marks during the Term, a royalty ("Royalty") equal to a percentage of Gross Sales.
Royalties shall be paid monthly by the tenth (10th) day of each month based upon Gross Sales for the preceding month.
The percentage of Gross Sales payable as a Royalty shall be as follows: (i) For the period commencing on
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, franchisees must pay royalties for using the Burger King system and marks. These royalties are a percentage of the restaurant's Gross Sales. Payments are due monthly, specifically by the 10th day of each month, and are based on the Gross Sales from the preceding month. The specific percentage charged for royalties is not provided in this excerpt.
It is important for prospective Burger King franchisees to understand how the royalty percentage is calculated, as it directly impacts their profitability. Gross sales typically include all revenue generated by the restaurant, with few deductions. Franchisees should clarify with Burger King the exact royalty percentage applicable to their franchise agreement and whether this percentage is subject to change under certain conditions.
While the FDD excerpt specifies the timing and basis for royalty payments, the actual royalty percentage is left blank in the document. A prospective franchisee should confirm the exact percentage with Burger King. Understanding the royalty structure is crucial for assessing the financial viability of the franchise and projecting potential earnings.