Franchisel.com — FDD Diligence Memo
Burger King
Generated 2026-04-06 · 2025 FDD · Government-filed source
Burger King
2025 FDD Diligence Memo
Score of 52/10 driven by: high financial transparency, declining unit count, limited territory protection.
Sys Health
6
Fin Strength
6
Econ Burden
3
Support
8
Contract
6
Change
+2
Red Flags & Key Signals
Net unit loss of -77 in reporting period. Declining networks may signal franchisee dissatisfaction or weak economics.
Double-digit active lawsuits is unusual. Review whether franchisee-initiated cases dominate (signals system dissatisfaction) vs regulatory actions.
Litigation is growing year over year. Request prior FDD filings to see the trajectory.
After leaving the franchise, you cannot operate a competing business in this radius. Evaluate the real-world impact on your exit options.
Franchisor is not obligated to protect your market area. Encroachment from company-owned units or other franchisees is possible.
The FDD explicitly reserves the franchisor's right to operate competing channels (e.g. online, other brands) within your market.
Item 2 shows multiple executives hired within 2 years of this FDD filing. Leadership instability can affect franchisee support quality during transitions.
Avg $1,658,463 from government-filed FDD. Transparent disclosure is a positive signal.
Investment Overview
Items 5, 6, 7Total investment range: $348,400 – $4,705,600. Initial fee: $50,000. Royalty: 4.5%. Marketing fund: 4.5%.
Payback estimate: Investment-to-disclosed-revenue ratio: 1.52x. This is the ratio of midpoint investment ($2,527,000) to disclosed avg revenue ($1,658,463). No profit assumptions are applied.
Item 19 — Revenue
Item 19 — 2025 FDD (government-filed)Item 19 discloses avg revenue of $1,658,463 (January 1, 2024 – December 31, 2024).
Sample: Partial4,774 units (71% of system) — moderate sample, check whether top performers are over-represented. Average ($1,658,463) and median ($1,561,502) are close — the distribution appears relatively even. Investment-to-disclosed-revenue ratio: 1.52x ($2,527,000 midpoint investment vs $1,658,463 avg revenue).
Item 20 — System Health
Item 20 — 2025 FDDSystem contracting — net -77 units in reporting period.
↓ Contracting77 more units closed or left the system than opened. Closure/transfer rate of 1% is within normal range.
Total Units
6,701
Net Growth
-77
Turnover
1%
Year-over-Year Trends
2025 FDDOpened
+63
Closed
-69
Net
-77
Turnover rate: 1%
Prior-year Item 19 revenue data not available. Unit data above covers the reporting period in the 2025 FDD.
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19Gross sales
Figure represents gross sales — standard basis for cross-brand comparison.
Profit not disclosed
Item 19 reports revenue only. No expense breakdown is provided. Profit cannot be determined from this disclosure alone.
Excludes ramp-up units
Includes only units open longer than 1 year — which excludes the below-average ramp-up period. Actual first-year revenue is typically lower.
Moderate sample (4774 of 6229 units)
77% of eligible units included — adequate but check whether top performers are over-represented.
Data from 2024
Revenue covers 2024 — 2 years old. Reasonably current but worth confirming recent trends with existing franchisees.
Average and median close
Average ($1,658,463) and median ($1,561,502) are within 15% — reasonably even distribution.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
69 units closed in the most recent FDD period. Ask franchisees: what actually drove those closures — was it market conditions, operations, or franchisor decisions?
Look for: Franchisees who left voluntarily vs. those terminated. Any pattern by region, years in system, or franchisee profile.
Cure period is only 5 days. Ask: have you ever received a default notice? How did the franchisor handle it — were they reasonable?
Look for: A short cure period combined with aggressive enforcement is a serious risk. Look for franchisees who feel supported vs. managed by threat.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
Item 2 shows recent leadership changes. Ask current franchisees: has the change in leadership affected support quality, speed of decisions, or the culture of the system?
Look for: Whether the new leadership has franchise operations experience. Disruption in field support after leadership transitions is common.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Management Team — Item 2 (Business Experience)
Leadership has prior franchise system experience; long-tenured executives (5+ years); recent leadership changes detected; 13 senior roles identified.
Item 2 · 2025 FDD · confidence: high
Territory — Item 12
NO exclusive territory — encroachment risk exists; franchisor may operate competing channels in your market; franchisor reserves online/ecommerce sales; no defined territory type.
Item 12 · 2025 FDD
Supplier Dependence — Item 8
Critical Supplier Dependence · 8/10Alternative suppliers may be approved with permission; mandatory purchases required from approved sources; defined approved supplier list exists; franchisor or affiliate receives revenue from supplier arrangements; mandatory categories: food_ingredients, packaging, equipment….
Item 8 · 2025 FDD
Data sources: 2025 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: Deep extraction from 2025 FDD (as amended 01/2026) filed with WI DFI (filing #637918). 1,057 pages. 416 pages read across all 23 Items, 6 exhibits fully read (D1/D2, V, X1, Y1, O1), 9 state addenda decoded. 30 canonical families, 118 evidence-grounded fields. Scorecard: 9.1/10.. · Payback estimates and margin assumptions are editorial — not from the FDD. This memo does not constitute legal or financial advice. Consult a franchise attorney and accountant before signing. Generated 2026-04-06 by Franchisel.com.