Burger King Wins against Franchisees in $1 Cheeseburger Suit
On November 19, Judge K. Michael Moore granted Burger King Corporation’s order to dismiss a lawsuit brought by the National Franchisee Association over the franchisor setting the price on its Value Meal menu, namely its $1 Double-Cheeseburger.
According to a South Florida Business Journal article,
They [NFA] argued that Burger King did not have the right under its franchise agreements to unilaterally impose maximum prices for products and that, even if the company did have the right, it was acting in bad faith.
The franchisees argued that requiring them to sell a double cheeseburger for $1 was costing them money.
Last April the franchisor made the decision to stop requiring restaurant owners to sell the double cheeseburger for $1, and raised the price to $1.29.
Regarding this latest ruling, Burger King said in a prepared statement that its marketing decisions were made “after careful market testing and with the best interests of our franchisees in mind.”
According to the court order, all counts were dismissed with prejudice, with the exception of count four. That claim stated that Burger King violated Florida’s Deceptive and Unlawful Trade Practices Act by allegedly failing to disclose to prospective franchisees that the franchisor had the power to set prices. The judge declined to exercise supplemental jurisdiction over Florida state law claim and dismissed it without prejudice, meaning it was not final and could be re-filed.
In the Business Journal article, an NFA source who did not want to be identified said,
While franchisees are disappointed with the court’s ruling, the right to price is vital to entrepreneurs’ ability to run successful business operations. The NFA is reviewing all legal avenues before it including the right to appeal this maximum pricing issue.
The NFA comprises approximately 75 percent of Burger King franchisees.
Burger King franchisee suit dismissed | South Florida Business Journal
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Related Articles:
- Burger King Pushes Industry Practices, Seeks to Force Franchises Into Mandatory Pricing
- Franchisees Sue Burger King over Mandatory Pricing
- Burger King Franchisees Take Complaints Directly to Board of Directors
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| NFA v Burger King Order.pdf | 561.73 KB |
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