What is the name of the security agreement discussed in the Burger King FDD?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Franchisee, any one (1) or more individual or partner comprising Franchisee, any one (1) or more Affiliates of Franchisee, or any one (1) or more Affiliates of any individual or partner comprising Franchisee wishes to accept a bona fide offer from a third party to purchase the Franchised Restaurant or any portion thereof or interest therein, Franchisee shall give BKC written notice setting forth the name and address of the prospective purchaser, the price and terms of the offer together with a franchise application completed by the prospective purchaser, a copy of the Purchase and Sale Agreement, executed by both Franchisee and purchaser, and all exhibits, copies of any real estate purchase agreement or agreements, proposed security agreements and related promissory notes, assignment documents, title insurance commitment and any other information that BKC may request in order to evaluate the offer.
Source: Item 23 — RECEIPTS (FDD pages 127–995)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, if a franchisee wishes to sell their Burger King restaurant, they must first offer Burger King the right to purchase it. As part of this process, the franchisee must provide Burger King with several documents, including "proposed security agreements and related promissory notes."
This means that if the sale of a Burger King franchise involves any financing where the buyer (the third party) is pledging assets as collateral, the details of that security agreement must be disclosed to Burger King. This allows Burger King to assess the financial stability of the proposed buyer and the terms under which the restaurant is being financed.
While the FDD mentions the requirement to provide proposed security agreements, it does not specify a particular named security agreement. It simply refers to any security agreement that might be part of the sale transaction. A prospective franchisee should be prepared to provide any such agreements to Burger King if they decide to sell their franchise.