After the termination or expiration of a Burger King franchise agreement, for how long is the franchisee restricted from owning or operating a nationally or regionally branded hamburger business within two miles of the former Burger King location?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee covenants and agrees for itself, its parent, subsidiaries and Affiliates that during the Term of this Agreement they will not own, operate or have any interest in any hamburger business except other franchised BURGER KING Restaurants. Franchisee further covenants and agrees that for a period of one (1) year after any sale, assignment, transfer, termination or expiration of this Agreement, these entities will not own, operate or have any interest in any hamburger business, except other franchised BURGER KING Restaurants, either at or within two (2) miles of the Premises. At BKC's request, Franchisee shall require each Owner and Managing Director to execute an agreement similar in substance to this Section in a form acceptable to BKC and naming BKC as a third party beneficiary with the independent right to enforce such agreement.
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 franchisee is restricted from operating a competing hamburger business for a period of one year after the termination, expiration, sale, assignment, or transfer of the franchise agreement. This restriction applies to owning, operating, or having any direct or indirect interest in any nationally or regionally branded hamburger business.
This restriction applies to the franchisee, their parent companies, subsidiaries, owners, affiliates, sister companies, and shareholders who directly or indirectly control more than 10% of the equity securities of the franchisee. The restriction is limited to the specific location of the former Burger King restaurant or within a two-mile radius of that location. The only exception to this restriction is owning or operating other franchised Burger King restaurants.
This non-compete clause ensures that former Burger King franchisees and their related entities do not directly compete with the Burger King system shortly after leaving the franchise. This protects Burger King's market share and brand recognition in the immediate vicinity of the former franchise location. A prospective franchisee should consider this restriction carefully, as it could limit their business options for a year following the end of their franchise agreement.