Under what conditions related to franchise termination or non-renewal in Hawaii will Burger King compensate a developer, and what items are excluded from this compensation?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS AMENDMENT IS AN ATTACHMENT TO ALL DEVELOPMENT AGREEMENTS GRANTED IN THE STATE OF HAWAII.
AMENDMENT TO DEVELOPMENT AGREEMENT REQUIRED BY THE STATE OF ILLINOIS
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 Illinois:
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- In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates j
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, an amendment to the Development Agreement for franchises offered and sold in Hawaii stipulates conditions regarding compensation upon termination or non-renewal. Burger King is required to compensate the developer for the fair market value of inventory, supplies, equipment, and furnishings at the time of termination or expiration. This compensation applies only to items purchased from Burger King or a supplier designated by Burger King.
In addition to the above, if Burger King refuses to renew a franchise with the intention of converting the business to one owned and operated by Burger King, the company must also compensate the developer for the loss of goodwill. However, there are exclusions to this compensation. Burger King is not required to compensate for personalized materials that have no value to the company.
Burger King is allowed to deduct reasonable costs associated with removing, transporting, and disposing of the developer's inventory, supplies, equipment, and furnishings. Furthermore, Burger King can offset any monies owed to them by the developer against the compensation amount. This amendment ensures that Burger King complies with the Hawaii Franchise Investment Law, providing certain protections to developers in the event of termination or non-renewal.