What does the Burger King franchisee recognize regarding additional contributions from U.S. franchisees in the Designated Market Area (DMA)?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
bill FRANCHISEE. FRANCHISEE's Additional Contribution is paid in arrears and is due to BKC on the 10th day of each month during the Term. The first payment under the Investment Spending Program For purposes of this Agreement FRANCHISEE's Participating Restaurants (the "Participating Restaurants") are as follows: For purposes of this Agreement the Un-owned Restaurants as defined in Paragraph 10 are as follows:
BURGER KING COMPANY LLC INVESTMENT SPENDING PROGRAM MATCHING INCENTIVE FUND AGREEMENT FOR MAJORITY CLAUSE RESTAURANTS
THIS INVESTMENT SPENDING PROGRAM AGREEMENT ("Agreement") is by and between BURGER KING COMPANY LLC ("BKC") and the undersigned ("FRANCHISEE"), with respect to the execution of local marketing programs (as outlined more fully below) to be conducted by BKC pursuant to the terms and conditions set forth below. BKC and FRANCHISEE agree as follows:
- Investment Spending Programs. FRANCHISEE recognizes that additional contributions (collectively "Additional Contributions") from U.S. franchisees of BURGER KING® restaurants ("Owners") in the Designated Market Area ("DMA") set forth in "Appendix A" (attached hereto and incorporated herein by this reference) over and above the monthly advertising contribution Owners are required to pay under their franchise agreements ("Franchise Agreements") with BKC will be needed in order to pay for local marketing programs (collectively the "DMA Programs") for the DMA during the Term (defined below) of this Agreement. FRANCHISEE hereby commits to support the DMA Programs during the Term and to make FRANCHISEE's Additional Contribution (defined in Paragraph 6 below) to BKC pursuant to the terms and conditions set forth herein. Accordingly, FRANCHISEE hereby requests that BKC take such actions and make such commitments as BKC determines to be reasonably necessary to implement the DMA Programs in the DMA during the Term. BKC hereby agre
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 acknowledges that additional contributions from U.S. Burger King franchisees (referred to as "Owners") within a Designated Market Area (DMA) are necessary. These contributions are above the standard monthly advertising fees required by their franchise agreements with Burger King Company (BKC). The purpose of these additional funds is to support local marketing programs, known as DMA Programs, throughout the agreement's term.
The franchisee commits to supporting these DMA Programs and providing their share of the additional contribution to BKC, following the agreement's terms. The franchisee also requests that BKC take the required actions to implement the DMA Programs effectively within the DMA during the term. BKC agrees to take actions deemed reasonably necessary to implement the DMA Programs, subject to the agreement's conditions.
This agreement becomes effective once BKC receives the executed document from the franchisee. However, BKC retains the right to terminate the agreement if it does not secure a Minimum Required Commitment, defined as participation from at least 66.7% of the adjusted population base of Burger King restaurants within the DMA. This ensures that a significant portion of franchisees in the area are contributing to the local marketing efforts.
This arrangement is typical in franchise systems, where local advertising is often funded through a combination of mandatory and voluntary contributions to maximize marketing impact within a specific geographic area. Prospective Burger King franchisees should understand the terms of the DMA program, including the calculation of their additional contribution and the implications of not meeting the Minimum Required Commitment.