When transferring a Burger King franchise, what options does BKC have regarding the agreement the transferee must enter into?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) That the transferee, at BKC's election, consistent with then current BKC policy, (a) enter into a written assignment, in a form satisfactory to BKC, assuming and agreeing to discharge all of Franchisee's obligations under this Agreement, or (b) execute, for a term ending on the Expiration Date of this Agreement, BKC's then-current form of BURGER KING Restaurant franchise agreement applicable to such transferee and such other ancillary agreements as BKC may require for the Franchised Restaurant; provided, however, that the royalty and advertising contribution rates shall be the
same as stated herein. If the transferee is required to execute a new franchise agreement, such agreement shall supersede this Agreement in all respects;
Source: Item 22 — CONTRACTS (FDD pages 125–127)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, Burger King Corporation (BKC) has options regarding the agreement a transferee must enter into when a franchise is transferred. BKC can elect, consistent with its current policy, to have the transferee either (a) enter into a written assignment, in a form satisfactory to BKC, assuming and agreeing to discharge all of the franchisee's obligations under the existing agreement, or (b) execute BKC's then-current form of Burger King Restaurant franchise agreement for a term ending on the expiration date of the original agreement, along with any other ancillary agreements BKC may require.
Notably, the royalty and advertising contribution rates in the new agreement will remain the same as in the original agreement. However, if the transferee is required to execute a new franchise agreement, that new agreement will supersede the original agreement in all respects. This means that while the royalty and advertising fees remain consistent, all other terms and conditions would be subject to the current franchise agreement terms.
This provision gives Burger King flexibility in structuring franchise transfers, allowing them to ensure compliance with current standards while maintaining consistent revenue streams. For a prospective franchisee, it's crucial to understand which option BKC will choose, as a new franchise agreement could introduce different obligations and requirements compared to simply assuming the existing agreement.