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Judge Denies Burger King Request to Shutter Stores

A US Magistrate judge denied Burger King’s request to obtain a temporary injunction against a Miami franchisee for failure to install new cash registers to comply with its latest POS policy. If granted, the court order would have forced the owner to close his four restaurants.

The deadline for the required installation was December 31, 2009 or after a warning that gave him until February 12, 2010. The franchisee did not install the registers until April.

The Miami Herald reported last week that Judge Edwin G Torres wants a trial to decide whether franchisee Al Cabrera violated the franchise agreement and is illegally using Burger King’s trademarks.

A key to the case’s outcome will likely hinge on whether the cash register system in Cabrera’s restaurants were “obsolete.”

The court agrees that Burger King can require its franchisees to make equipment changes, but within certain parameters of the existing franchise agreement. The final decision could have broad implications within Burger King's franchise system and beyond.

But the news piece states that Judge Torres left open the door for Burger King.

If the Court determines that BKC's policy to update the POS systems on this timetable rendered the existing equipment obsolete, BKC will then be able to shut down Defendant's operations.'

Burger King attorney Michael Joblove of Genovese Joblove & Battista said he was not troubled by the judge’s decision, which he did not expect to affect the outcome of the case.

It's a timing issue, not a substantive issue,'' Joblove said. ``The only victory Mr. Cabrera received was more time. At this time he does not have to close his four restaurants.''

If Burger King fails to prove that the franchisee’s cash registers were obsolete, that could affect hundreds of other franchise owners who were forced to install the new system.

Cabrera’s attorney Robert Zarco of Zarco Einhorn Salkowski & Brito stated,

It is extremely unfortunate that Burger King has used iron-fisted tactics such as threatening termination of franchisees as a way of requiring them to prematurely invest tens of thousands of dollars on equipment to replace perfectly operating equipment.

Zarco feels this case sets new legal precedent. He declared, “It will help restrain the franchisor in imposing draconian measures on the franchisees.''

Miami Herald Article:  Burger King Loses First Round in Fight against Franchisee

Burger King v CabreraDOC001.PDF248.04 KB
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