If a Burger King franchisee transfers their interest in a Participating Restaurant, what obligations does the franchisee have 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 remain personally liable for any Additional Contribution they promised under the Investment Spending Program Agreement.
As a condition of the transfer, the franchisee must ensure that the purchaser 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's interests by ensuring that the Additional Contribution continues to be paid even after a transfer of ownership. For a prospective franchisee, this highlights the importance of carefully considering the Additional Contribution obligations before agreeing to a transfer, and ensuring the buyer is fully aware of, and agrees to assume, these obligations.