Under the Carrols Refranchise Addendum for Burger King, what agreement obligates the Franchisee to remodel the Franchised Restaurant?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- **2.
REMODEL REQUIRED.** Franchisee must Complete the RTF2 Remodel of the Franchised Restaurant in accordance with the terms of the Remodel Agreement.
Franchisee acknowledges and agrees that Completion of the RTF2 Remodel is a material consideration for and inducement to BKC to enter into the Franchise Agreement and this Addendum.
All references to "the RTF2 Remodel" in this Addendum shall mean an RTF2 Remodel of the Franchised Restaurant.
All provisions of the Remodel Agreement shall be applicable to the Franchised Restaurant, including, but not limited to, Sections 7 and 8 of the Remodel Agreement.
- **3.
LOCKUP PERIOD**.
Notwithstanding anything to the contrary in the Franchise Agreement, including, without limitation, the provisions of Section 15.F, until such time as the RTF 2 Remodel of the Franchised Restaurant is Completed in accordance with the Remodel Agreement and this Addendum, BKC may withhold its consent to any proposed transfer of an interest referred to in Section 15.A or 15.B for any reason or no reason whatsoever in its sole discretion.
- **4.
DEFAULT AND TERMINATION**.
Subsection (26) of Section 18.A. of the Franchise Agreement is hereby deleted in its entirety and replaced with the following:
- (26) Failure by (i) Franchisee to comply with any other provisions of this Agreement, the Lease for the Premises, or any other agreement relating to the Franchised Restaurant, (ii) Franchisee (or any Affiliate) to comply with the Remodel Agreement, or (iii) Franchisee (or any Affiliate) to comply with any provision of any BURGER KING franchise agreement, lease or other agreement between Franchisee (or such Affiliate) and BKC relating to any of the BURGER KING Restaurants listed on SCHEDULE 1 attached hereto.
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, under the Carrols Refranchise Addendum, the franchisee is obligated to complete the RTF2 Remodel of the franchised restaurant according to the terms of the Remodel Agreement. The completion of this remodel is considered a significant factor that induces Burger King Company (BKC) to enter into the Franchise Agreement and the addendum. All the provisions outlined in the Remodel Agreement, including sections 7 and 8, apply to the franchised restaurant.
This requirement means that franchisees need to be prepared to undertake a potentially substantial remodel of their Burger King restaurant to meet current brand standards. This obligation is not just a suggestion but a contractual requirement, and failure to comply can have serious repercussions. The addendum emphasizes the importance of this remodel by stating it is a material consideration for Burger King's agreement to the franchise.
Furthermore, until the RTF2 Remodel is completed according to the Remodel Agreement and the addendum, Burger King can withhold consent to any proposed transfer of interest in the franchise. This "lockup period" gives Burger King significant control over the franchise's ownership until the remodel is finished. Non-compliance with the Remodel Agreement by the franchisee or any affiliate can lead to a default and potential termination of the Franchise Agreement, highlighting the critical nature of fulfilling the remodel obligations.