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Thread: Burger King franchise owners sue company over $1 burgers

  1. #1
    Elite Member Moongirl's Avatar
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    Oct 2005

    Default Burger King franchise owners sue company over $1 burgers
    Burger King franchisees sue over $1 promotion

    They claim chain forcing them to sell double cheeseburgers at a loss
    The Associated Press
    updated 5:27 p.m. PT, Thurs., Nov . 12, 2009

    CHICAGO - Burger King franchisees sued the hamburger company this week over its $1 double cheeseburger promotion, saying they're losing money on the deal and the company can't set maximum menu prices.

    The National Franchise Association, a group that represents more than 80 percent of Burger King's U.S. franchise owners, said the $1 promotion forces restaurant owners to sell the quarter-pound burger with at least a 10-cent loss.

    While costs vary by location, the $1 double cheeseburger typically costs franchisees at least $1.10, said Dan Fitzpatrick, a Burger King franchisee from South Bend, Ind. who is a spokesman for the association. That includes about 55 cents for the cost of the meat, bun, cheese and toppings. The remainder typically covers expenses such as rent, royalties and worker wages.

    "New math, or old math, the math just doesn't work," Fitzpatrick said.

    After testing the $1 deal in markets across the country, the discounted burger went on sale nationwide last month even though franchise owners, who operate 90 percent of the company's 12,000 locations, twice rejected the product because of its expense.

    "The current management team has disregarded rights that Burger King franchisees have always had," Pennsylvania franchise owner Steve Lewis said in a statement.

    Denise Wilson, a spokeswoman for the nation's No. 2 hamburger chain, said the Miami restaurant company believes the litigation is "without merit," particularly after an earlier appeals court ruling this year showing the company had a right to require franchise owners to participate in its value menu promotions.

    Restaurants, especially fast-food chains, have been slashing menu prices because of the poor economy. Executives hope the deeply discounted deals will bring in diners who are spending less when they eat out, or opting to stay home altogether.

    When the $1 double cheeseburger was announced this fall, analyst said it could increase restaurant visits by as much as 20 percent. But despite that boost, a Deutsche Bank analyst said as much as half of the gain recorded from increased traffic could be lost because customers were spending less when they ordered food.

    The lawsuit was filed Tuesday in U.S. District Court in Southern Florida.

    Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
    URL: Burger King franchisees sue over $1 promotion - Food Inc.-
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    Yeah, I'm sure this is driving them all into bankruptcy...

  2. #2
    Elite Member Nevan's Avatar
    Join Date
    Jul 2008


    I don't eat at Burger King but haven't they done this same exact promotion numerous times in the past?

  3. #3
    Elite Member kingcap72's Avatar
    Join Date
    May 2007
    10 miles from Pootie Tang


    A lawsuit over a $1 burger promotion? Seriously? If you don't want to be held to the corporate whims of Burger King, then don't operate one of their franchises.

  4. #4
    Elite Member celeb_2006's Avatar
    Join Date
    Jul 2006


    S**t, 99 percent of franchises can't even get their heads out of their arses for honoring coupon fliers in the mail (free fries with order of meal, two burgers for one, etc.).

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