For Burger King franchises, what is the financial threshold for alterations that triggers the requirement to furnish a surety bond or other security to the Lessor?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
nd specifications shall be approved by all governmental authorities having jurisdiction and any public utility company having an interest in the Alterations;
- (d) before the commencement of any Alterations, Lessee shall pay the amount of any increase in premiums on insurance policies for endorsemen
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, if a franchisee plans to make alterations to the premises, a surety bond or other security is required if the estimated cost exceeds a certain threshold. Specifically, if the estimated cost of the alteration exceeds $50,000, the franchisee must furnish to the Lessor a surety bond from a company acceptable to the Lessor.
The surety bond must be equal to the estimated cost of the alteration work. Alternatively, the franchisee can provide other security that is satisfactory to the Lessor. This bond or security guarantees that the alteration work will be completed without any liens or encumbrances on the property.
This requirement protects the Lessor by ensuring that sufficient funds are available to complete the alterations and that the property remains free of any legal claims related to the work. For a prospective Burger King franchisee, this means that any significant renovation or modification project will require either obtaining a surety bond or providing alternative security, adding to the overall cost and complexity of the project.