Burger King Franchisees In Dispute Over $1 Double Cheeseburger Deal
In a report filed yesterday, Burger King franchisees have sued the hamburger company because of their overall decrease in promotional sales due to its $1 double cheeseburger promotion. The company shares fell 18 cents, which equals an overall decrease of one percent. Due to the decrease, the company cannot set maximum menu prices, which is hurting their company indefinitely. The National Franchise Association who represents over 80 percent of the company’s franchise owners, stated that the $1 deal promotion forces the franchise’s to sell the cheeseburger at a discounted rate, which results in a 10 – cent loss for each burger sold. The promotion swept across the country a few months ago after being tested in specific markets even though franchise owners disagreed with the promotion due to its heavy expense. Some say that the company has ignored all rights that the franchise owners have had and this has resulted in a loss of sales for them. Denise Wilson, who is a spokeswoman for the Nations burger joint, said she “believes the litigation is without merit”. This poses a true statement in the fact that previously this year, an earlier appeals court ruled that the Burger King company maintained their rights in requiring the franchise owners to participate in all promotions the company set forth. All over the country, fast food restaurants have been cutting their prices and boosting promotions due to the failing economy. Burger King executives hope that the promotion will bring in more customers who are looking to spend less when they eat out. When the $1 deal promotion was first introduced to the public, some analysts concluded that it should boost the restaurant visits up to 20 percent. Another analyst agreed that it may boost overall restaurant visitation but the effort might be lost due to customers spending less on their visits to the restaurant. The lawsuit was filed in Florida in the U.S. District Court.