Under what conditions does a Burger King franchisee remain personally liable for Royalty and Advertising Contribution payments after transferring their interest in a contract of sale with installment payments?

According to Burger King's 2025 Franchise Disclosure Document, a franchisee (referred to as "Transferor") remains personally liable for Royalty and Advertising Contributions even after transferring their interest in the franchise through a contract of sale with installment payments. This liability continues until the total amount of the original installment payments to be made under the contract for sale or other instrument evidencing the debt is paid.

However, if the holder of the note or other evidence of debt deems the obligation satisfied, the Transferor will simultaneously be released from liability to Burger King for Royalty and Advertising Contributions. The contract for sale must stipulate that installment payments are subordinate to the Royalty and Advertising Contributions owed to Burger King. Additionally, the note or other evidence of the obligation cannot be assigned by the holder or payee.

This provision protects Burger King's financial interests by ensuring that Royalty and Advertising Contributions are prioritized over other financial obligations of the franchisee. It also ensures that Burger King retains recourse to the original franchisee (Transferor) should the new franchisee (Transferee) fail to meet these critical payment obligations. Franchisees should carefully consider these conditions and ensure that any sale agreements reflect these requirements to avoid ongoing liability.