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8 Comments

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I agree with the guest on this one! BKC had no other choice than to fight for survival.

RichardSolomon's picture

Has anyone produced any actual metrics on this? If what you

say is correct, then I would have to agree, Inviting the homeless to visit your store would certainly not help to promote value at any level.

BK is following YUM Brands..

"The franchisees see the sale as the burger. BK sees it as the probable total transaction - burger, fries and drink - which is a net profit transaction."

Sorry Mr. Solomon, but I have to agree with the BK franchisees on this one. As a franchise owner myself, we find that most people who buy these "value" meals, don't buy any sides, and always ask for a glass of water! Believe me Q has tried the same tricks and it just doesn't work. The people who are buying these meals can't afford much else!This is why they are buying them in the first place insead of a sit-down filet mignon dinner!!!!

Peter Silverman's picture

individual v. association

Eric or others:

What do you see as the advantages/disadvantages of filing as an association as opposed to filing for one franchisee, for example one in a relationship state where you can choose the home forum?

RichardSolomon's picture

Actually it is a whopper of a decision. Franchisee Associations

will have more impact as they are more and more permitted to represent the franchisees as a group regarding issues that impact the entire system. Great job, Eric.

Ray Borradale's picture

I take your point

If there was symmetry in a new case with the argument that ‘won’ the day here would there be a Court inclination to be consistent? Why didn’t the Court consider the total transaction net in this case?

No obvious conflict with your FTC franchise guy - just consistency.

RichardSolomon's picture

BK is following the Yum Brands example of Power Franchising.

It is a variation of the 11th guard order "I will walk my post from flank to flank and take no shit from any rank".

As for the FTC - Gimme a break. The FTC franchise guy comes from the IFA and some big franchisor law firm - He also expects to go back there to a big welcome when his term is up.

There is a question of whether this promotion really does requires a sale below cost- loss selling. The franchisees see the sale as the burger. BK sees it as the probable total transaction - burger, fries and drink - which is a net profit transaction.

It might be somewhat difficult to convince a court that a probable net profit transaction represents bad faith.

Ray Borradale's picture

Burger King Kon

If I read this incorrectly then I’m sure someone will tell me. In NFA v BKC haven’t BKC just spat in the eye of the Court finding of bad faith and possibly flexed franchisor financial muscle to tell franchisees everywhere that a challenge on good faith will not be tolerated.

Destroying franchisee bottom line in the process of increasing royalty is not new but it seems to me that BKC just turned around after the finding against it and discounted the ‘Buck Double’ saying bring it on; again.  If franchisees can fund another case can they fund another after that?

It seems that in challenging NFA’s ability to represent it’s members in this action they were probably draining NFA’s fighting fund and were perhaps already planning another assault on franchisee bottom line with middle finger ready to flex.

What happened? Did BKC wake up one morning after the Court finding and decide they did not want to sell franchises anymore and it would bring down the value of franchisee investments to teach them a lesson?  

These BKC execs are not nice people. But many already knew that. How does the FTC take this type of abuse of BKC’s greater financial power and basically ignore any obligation for good faith dealing?  I would think Judge K. Michael Moore would like to see BKC front up again.