For a Burger King Franchised Restaurant (other than an Excess Restaurant) with an FSS Development Grade of "A" or "B", what Advertising Contribution amount is due during the first year of the Developer Franchise Agreement?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
e first (1st) year of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty minus 3.5% of monthly Gross Sales at such Excess Restaurant; (B) during the second (2nd) year of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty minus 3.0% of monthly Gross Sales at such Excess Restaurant; (C) during the third (3rd) and fourth (4th) years of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty minus 2.5% of monthly Gross Sales at such Excess Restaurant; (D) during the fifth (5th) year of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty minus 2.0% of monthly Gross Sales at such Excess Restaurant; (E) during the sixth (6th) year of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty minus 1.5% of monthly Gross Sales at such Excess Restaurant; and (F) during the seventh (7th) year and for the remainder of the term of the Developer Franchise Agreement, the Base Fee amount of Royalty; and
- (ii) if the FSS Development Grade for such Excess Restaurant is a "D" or "F" (as determined in accordance with Section 5.4), then the Base Fee amount of Royalty for the entire term of the Developer Franchise Agreement;
- 5.5.4 With respect to each Franchised Restaurant other than Excess Restaurants, Advertising Contribution in the following amounts:
- (i) if the FSS Development Grade for such Franchised Restaurant is an "A" or "B" (as determined in accordance with Section 5.4), then (A) during the first (1st) year of the term of the Developer Franchise Agreement, the Base Fee Amount of Advertising Contribution minus 2.0% of monthly Gross Sales at such Franchised Restaurant; (B) during the second (2nd) year of the term of the Developer Franchise Agreement, the Base Fee Amount of Advertising Contribution minus 1.5% of monthly Gross Sales at such Franchised Restaurant; (C) during the third (3rd) and fourth (4th) years of the term of the Developer Franchise Agreement, the Base Fee Amount of Advertising Contribution minus 1.0% of monthly Gross Sales at such Franchised Restaurant; (D) during the fifth (5th) and sixth (6th) years of the term of the Developer Franchise Agreement, the Base Fee Amount of Advertising Contribution minus 0.5% of monthly Gross Sales at such Franchised Restaurant; and (E) during the seventh (7th) year and for the remainder of the term of the Developer Franchise Agreement, the Base Fee amount of Advertising Contribution;
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 advertising contribution for a franchised restaurant (other than an Excess Restaurant) with an FSS Development Grade of "A" or "B" during the first year of the Developer Franchise Agreement is the Base Fee Amount of Advertising Contribution minus 2.0% of monthly Gross Sales at such Franchised Restaurant.
The FSS Development Grade is determined by Burger King and may consider the performance of Burger King restaurants owned and operated by the developer, their affiliates, or other franchisees with common ownership or management. If a developer has not yet received their first FSS letter grade, they will be deemed to have a grade of "B" until an official grade is assigned.
The "Base Fee" is defined as the greater of (i) the standard undiscounted rate for Advertising Contribution set forth in Burger King's then current Franchise Disclosure Document at the time of such election by BKC and (ii) an amount equal to a percentage of monthly Gross Sales to be determined by BKC in its sole discretion, not to exceed 4.5% of Gross Sales. The advertising contribution amounts are exclusive of any incremental Advertising Contribution amounts payable by Developer pursuant to any FTF Agreement.
This means that a new Burger King franchisee with a good FSS Development Grade will pay a reduced advertising contribution during their first year, but the exact amount will depend on their gross sales and the Base Fee amount determined by Burger King. Franchisees should inquire about the current Base Fee and how it is calculated to accurately project their advertising contribution expenses.