If Burger King operates the restaurant for the estate, what happens to the net income?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) If the Heir is not approved or there is no Heir, the estate of the deceased shall sell the Franchised Restaurant to an acceptable party within eighteen (18) months from the date of Franchisee's death or incapacity, and BKC shall have an option, but not the obligation, to operate and/or manage the Franchised Restaurant for the account of Franchisee's estate until the deceased or incapacitated Franchisee's interest is transferred to another party acceptable to BKC.
Should BKC elect to operate and/or manage the Franchised Restaurant, BKC shall make a complete accounting and shall forward the net income from the operation to Franchisee's estate, less expenses and a reasonable management fee.
If the conveyance of the Franchised Restaurant to a party acceptable to BKC has not taken place within the eighteen (18)-month period, BKC shall have the option to purchase the Franchised Restaurant at fair market value.
Source: Item 23 — RECEIPTS (FDD pages 127–995)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, if the heir to a Burger King franchise is not approved or there is no heir, the deceased's estate must sell the restaurant within 18 months. During this time, Burger King has the option to operate or manage the restaurant for the estate's account.
Should Burger King choose to operate the restaurant, they will provide a complete accounting of the finances. The net income from the restaurant's operation will be forwarded to the franchisee's estate. This net income is calculated after deducting expenses and a reasonable management fee charged by Burger King for overseeing the restaurant's operations.
If the restaurant is not sold to a party acceptable to Burger King within the 18-month timeframe, Burger King has the option to purchase the restaurant at fair market value. This ensures that Burger King has a mechanism to maintain brand standards and operational consistency even in the event of a franchisee's death or incapacity.