Under what circumstances does a Burger King franchisee have to pay collection costs?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
Should FRANCHISEE fail to make FRANCHISEE's Additional Contribution which FRANCHISEE has promised, contracted and agreed to pay herein for any reason, including but not limited to the closure of a restaurant for which an Additional Contribution is owed, FRANCHISEE shall, on demand by BKC, pay in addition to FRANCHISEE's Additional Contribution, all costs and expenses, including interest and reasonable attorneys' fees, paid or incurred by BKC in enforcing this Agreement. FRANCHISEE agrees that its/his/her payment history pursuant to this Contract may be released to other Owners in the DMA.
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 may have to pay collection costs under specific circumstances related to their financial obligations to Burger King Corporation (BKC). If a Burger King franchisee fails to make their 'Additional Contribution,' which they have promised, contracted, and agreed to pay, they will be responsible for covering collection costs. This applies regardless of the reason for the failure to pay, including situations where a restaurant closes but still owes an Additional Contribution.
The collection costs that the Burger King franchisee would be responsible for include all costs and expenses incurred by BKC in enforcing the agreement. This specifically includes interest and reasonable attorneys' fees. BKC can demand that the franchisee pay these costs in addition to the original unpaid Additional Contribution.
Furthermore, the FDD states that the franchisee's payment history related to this agreement may be shared with other Burger King owners within the same Designated Market Area (DMA). This creates a transparent environment regarding financial responsibility among franchisees. This clause underscores the importance of meeting financial obligations to avoid incurring additional costs and potential reputational damage within the Burger King franchise network.