Under what conditions can Burger King transfer its rights and obligations under the Program Agreement?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
All the terms, covenants, representations, warranties and conditions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by the successors and assigns of BKC. This Agreement and the rights and obligations under it shall not be assignable by the BUYER. Any assignment in contravention of this provision shall be void. Any assignment by BUYER shall not relieve BUYER of its liabilities hereunder.
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, Burger King (BKC) has the right to transfer its rights and obligations under the agreement, and these terms are binding and enforceable by BKC's successors and assigns. However, the buyer is explicitly restricted from assigning the agreement. If the buyer does assign the agreement, they are still liable under the agreement, even after the assignment. Any assignment by the buyer that violates this provision will be considered void.
This clause ensures that Burger King can freely transfer its interests in the agreement to another party, such as in a merger or acquisition. However, it prevents the franchisee (referred to as the BUYER in this section) from doing the same without potentially remaining liable, giving Burger King greater control over who operates its franchises and ensuring continuity and adherence to brand standards.
This is a fairly standard clause in franchise agreements, as it allows the franchisor flexibility in its business dealings while maintaining control over the franchisees. Prospective Burger King franchisees should understand that they cannot freely transfer their rights and obligations without Burger King's consent and that they may remain liable even after an assignment.