What secures the loan for a Burger King restaurant purchased under the Crown Your Career Program?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
The loan will be secured by all assets of your BURGER KING Restaurant(s) (Security Agreement – Section 2). We may also require that you and your spouse or partner personally guaranty your obligations under the Promissory Note to us (Guaranty attached as Exhibit D3 to this disclosure document). Under the Guaranty, the guarantors are jointly and severally liable, and waive all defenses. The guarantors waive all notices to which they may be entitled as well as notice of protest and various other notices.
If you make any sale or transfer of any interest in you (if you are an entity), the BURGER KING Restaurant(s), or the Franchise Agreement, the outstanding balance and accrued interest due under the Promissory Note is immediately due to us (Promissory Note – Section 21). We can assign the loan and our interest in any collateral.
Source: Item 10 — FINANCING (FDD pages 60–62)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, loans provided under the Crown Your Career Program are secured by the assets of the Burger King restaurant being purchased. Specifically, the loan is secured by all assets of your Burger King Restaurant(s) (Security Agreement – Section 2). This means that if a franchisee defaults on the loan, Burger King has a legal claim to the restaurant's assets, which they can seize and sell to recover the outstanding debt.
In addition to the restaurant's assets, Burger King may also require a personal guarantee from the franchisee and their spouse or partner. This personal guarantee makes the individuals personally liable for the debt, meaning that Burger King can pursue their personal assets if the restaurant's assets are insufficient to cover the outstanding loan balance. The FDD specifies that guarantors are jointly and severally liable and waive all defenses and notices to which they may be entitled.
Furthermore, if a franchisee attempts to sell or transfer any interest in the business, the restaurant, or the Franchise Agreement, the full loan balance becomes immediately due. Burger King also retains the right to assign the loan and their interest in any collateral to another party. These conditions highlight the significant financial obligations and potential risks associated with the Crown Your Career Program, emphasizing the importance of carefully reviewing the loan terms and understanding the implications of default.