If a Burger King franchisee transfers their interest in Participating or Un-Owned Restaurants, what obligation remains 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 11 below and set forth in Appendix A), FRANCHISEE shall remain personally liable for any FRANCHISEE's Additional Contribution promised pursuant to this Agreement (in accordance with the Assignment and Transfer provisions of 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 Participating Restaurants and Un-Owned Restaurants, they remain personally liable for any Additional Contribution promised under the agreement.
To facilitate the transfer, Burger King requires that the purchaser(s) of the Participating Restaurants and Un-Owned Restaurants become jointly and severally obligated for the franchisee's Additional Contribution. This means that the new owner(s) also assume 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 understanding the terms of the Additional Contribution and the potential long-term financial implications, even if they decide to sell their restaurants.