What is Burger King Lessee prohibited from doing regarding settlements related to Hazardous Substances without first notifying the Lessor?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) Actions and Proceedings. Except in emergencies or as otherwise required by law, Lessee shall not perform any Remediation in response to the presence or release of any Hazardous Substances on or about the Premises without first giving written notice to Lessor. Lessee shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Substances in any way connected with the Premises without first notifying Lessor of Lessee's intention to do so and affording Lessor the opportunity to participate in any such proceedings.
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, a Burger King lessee is restricted from entering into any settlement agreement, consent decree, or other compromise regarding claims related to hazardous substances connected to the premises without first notifying the lessor. The lessee must inform the lessor of their intention to settle and provide the lessor with the opportunity to participate in any proceedings related to the settlement.
This stipulation ensures that the lessor is kept informed and has a chance to be involved in any legal proceedings concerning hazardous substances on the property. This is particularly important because any environmental issues could significantly impact the property's value and the lessor's liability. By requiring notification and offering the opportunity to participate, the lessor can protect their interests and ensure that any settlement is appropriate and addresses potential environmental concerns.
For a prospective Burger King franchisee, this means that if any environmental issues arise on the leased property, they cannot independently settle claims without involving the lessor. This requirement adds a layer of complexity to managing environmental issues but is designed to protect all parties involved. Franchisees should be aware of this obligation and ensure they have a process in place to notify the lessor promptly in the event of any hazardous substance-related claims or incidents.