Under what circumstances can Burger King terminate the Franchise Agreements for each Participating Restaurant if the franchisee breaches obligations under the Co-Investment Agreement?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) If Franchisee breaches any of its obligations under this Agreement, Franchisee shall have ten (10) days after written notice from BKC to cure such breach. Any uncured breach of Franchisee's obligations under this Agreement shall also constitute an event of default under the Franchise Agreements for each Participating Restaurant (with no further opportunity to cure) and BKC may, at its option, terminate the applicable Franchise Agreements upon written notice to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 127–995)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, if a franchisee breaches any obligations under the Co-Investment Agreement, Burger King will provide a written notice, and the franchisee will have ten days to cure the breach. If the breach remains uncured after the ten-day period, it constitutes an event of default under the Franchise Agreements for each Participating Restaurant.
Burger King, at its discretion, may then terminate the applicable Franchise Agreements by providing written notice to the franchisee. Importantly, there is no further opportunity to cure the default once the initial ten-day period has elapsed.
This clause creates a significant risk for Burger King franchisees, as a breach of the Co-Investment Agreement can trigger the termination of all Franchise Agreements for Participating Restaurants, not just the restaurant directly involved in the breach. Franchisees should carefully review the terms of the Co-Investment Agreement and ensure they can comply with all obligations to avoid potential default and termination of their franchise agreements.