Under what circumstances is Burger King prohibited from requiring a Developer to assent to a release, assignment, novation, or waiver?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS AMENDMENT IS AN ATTACHMENT TO ALL DEVELOPMENT AGREEMENTS GRANTED IN THE STATE OF CALIFORNIA.
AMENDMENT TO DEVELOPMENT AGREEMENT REQUIRED BY THE STATE OF HAWAII
Notwithstanding anything to the contrary set forth in the Development Agreement, the following provisions shall supersede and apply to all BURGER KING franchises offered and sold in the State of Hawaii:
- The Development Agreement shall be amended by the addition of the following:
BKC shall comply with the Hawaii Franchise Investment Law, Hawaii Rev. Stat. §§ 482E, et seq., which currently requires BKC compensate Developer upon termination or refusal to renew the franchise for the fair market value, at the time of the termination or expiration of the franchise, of any inventory, supplies, equipment and furnishings which were purchased from BKC or a supplier designated by BKC. Personalized materials which have no value to BKC need not be compensated for. If BKC refuses to renew a franchise for the purpose of converting Developer's business to one owned and operated by BKC, BKC, in addition, must compensate Developer for the loss of goodwill. BKC may deduct reasonable costs incurred in removing, transporting, and disposing of Developer's inventory, supplies, equipment, and furnishings pursuant to these requirements, and may offset any moneys due BKC.
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- BKC may not require Developer at the time of entering into a franchise to assent to a release, assignment, novation, or waiver which would relieve any person from liability imposed by Hawaii Revised Statutes, Title 26, Chapter 482E. Any condition, stipulation or provision binding any person acquiring any franchise to waive compliance with any provision of Hawaii Revised Statutes, Title 26, Chapter 482E or a rule promulgated hereunder shall be void. This paragraph shall not bar or affect the settlement of disputes, claims or civil suits arising or brought under Hawaii Revised Statutes, Title 26, Chapter 482E.
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- Each provision of this Amendment is effective only to the extent with respect to such provision that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently without reference to this Amendment.
[Signature Page Follows]
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, there are specific state laws that restrict Burger King from requiring a developer to agree to certain waivers or releases. In Hawaii, Burger King cannot require a developer to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Hawaii Revised Statutes, Title 26, Chapter 482E. The FDD specifies that any agreement that binds a person acquiring a franchise to waive compliance with these Hawaii statutes or related rules is void. However, this does not prevent the settlement of disputes, claims, or civil suits arising under these statutes.
Similarly, in Minnesota, Burger King is prohibited from requiring a developer to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22. This provision ensures that developers retain their rights and protections under Minnesota franchise law. However, the restriction does not bar the voluntary settlement of disputes.
These stipulations are included as amendments to the Development Agreement, Multiple Target Reservation Agreement, and Target Reservation Agreement for franchises offered and sold in Hawaii and Minnesota. These amendments clarify that the specific state laws supersede any conflicting terms in the standard agreements, ensuring franchisees' rights are protected under local regulations. Prospective franchisees should carefully review these state-specific amendments to understand their rights and obligations.