In a Burger King lease agreement, what constitutes a 'Lease Year'?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
AURANT(S) AND FRANCHISE AGREEMENT(S)**
| BURGER KING Restaurant # | Address | Date of Franchise Agreement |
|---|---|---|
LEASE/SUBLEASE
KEY CONTRACT DATA PAGE
This Key Contract Data Page forms a part of the Lease and is incorporated by reference into the Lease.
| Lease Date: | |||||
|---|---|---|---|---|---|
| Lessee: | |||||
| Guarantor(s): | |||||
| Premises (Section | BURGER KING® Restaurant # | , as more particularly described on Exhibit A | , located at | ||
| 1.1): | |||||
| Commencement Date | Upon the earlier of (i), and (ii) the earliest of the following dates: | ||||
| (Section 2.1): | the plans and specifications; or (c) The date Lessee opens for business. | for the Premises by appropriate governmental authorities; and | (a) The date ten (10) days following the date of the issuance of a Certificate of Occupancy (b) The date ten (10) days following date of certification of Lessor's architect that the Land has been improved and the Building constructed is substantially in conformance with | ||
| Term (Section 2.1): | Twenty (20) years | ||||
| Original Term | |||||
| Expiration Date | |||||
| (Section 2.1): | |||||
| Guaranteed Minimum Annual Rent (Section 3.1): | Lease Year: | Guaranteed Minimum Annual Rental: | Monthly Installment: | ||
| Percentage Rental | Monthly Gross Sales: | Percentage: | |||
| Data Schedule | $0 - $133,333.33 | 8.5% | |||
| (Section 3.2): | $133,333.34 or higher | 10.0% | |||
| B |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
Based on the 2025 Burger King Franchise Disclosure Document, the term 'Lease Year' is used in the context of calculating the Guaranteed Minimum Annual Rent. The FDD excerpt shows a table with 'Lease Year' as a column header, indicating that the Guaranteed Minimum Annual Rental amount is specified on a yearly basis. This is relevant to Section 3.1 of the lease agreement.
For a prospective Burger King franchisee, understanding the 'Lease Year' is crucial because it directly impacts their financial obligations. The franchisee needs to know the guaranteed minimum rent they must pay each year of the lease term. This amount, along with percentage rental fees based on gross sales, determines the franchisee's base rental expenses.
The table also includes details on how percentage rental is calculated based on monthly gross sales, with different percentages applying to different sales ranges. Specifically, 8.5% applies to monthly gross sales between $0 and $133,333.33, while 10.0% applies to monthly gross sales of $133,333.34 or higher. Additionally, the table outlines the Building Improvement Funds, which are set at an annual sum of $6,000, payable in monthly installments of $500.
In summary, while the FDD excerpt does not explicitly define 'Lease Year', it uses the term to structure the schedule of guaranteed minimum annual rent and other financial obligations within the lease agreement. A prospective franchisee should carefully review the Key Contract Data Page and related lease sections to fully understand the specific amounts and payment schedules applicable to their Burger King restaurant location.