If a Burger King franchisee transfers their interest in a Participating Restaurant, what must the franchisee do regarding the Additional Contribution?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event FRANCHISEE transfers FRANCHISEE's interest in any of the Participating Restaurants (as set forth in Appendix A) and Un-Owned Restaurants (as defined in Paragraph 10 below and set forth in Appendix A), FRANCHISEE shall remain personally liable for the FRANCHISEE's Additional Contribution promised pursuant to this Agreement (in accordance with the Assignment and provisions of Transfer the relevant Franchise Agreement(s)) and as a condition to any such transfer shall require the purchaser(s) of any of the Participating Restaurants and Un-Owned Restaurants be or become jointly and severally obligated for FRANCHISEE's Additional 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, if a franchisee transfers their interest in a Participating Restaurant or an Un-Owned Restaurant, they will remain personally liable for any Additional Contribution they promised.
As a condition of the transfer, the franchisee must ensure that the purchaser of the restaurant becomes jointly and severally obligated for the franchisee's Additional Contribution. This means the new owner shares the responsibility for the financial obligation.
This requirement protects Burger King by ensuring that the Additional Contribution continues to be paid even after a transfer of ownership. For a prospective franchisee, this means they need to carefully consider the Additional Contribution and its terms, as they will remain liable for it even if they sell the restaurant unless the buyer assumes the obligation.