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Burger King files suit against 7 franchisees
January 26, 2010
Burger King Holdings Inc. has filed several lawsuits this month charging at least seven franchisees with breach of contract for not upgrading their point-of-sale systems by the company's deadline, according to a story on FOX Business.
Burger King's U.S. stores are nearly halfway through with implementing the POS systems, which are part of the company's strategy toimprove restaurant performance by enhancing controls and real time visibility into product sales. The POS upgrade also is tied to the chain's new batch broilers, which are scheduled to be in all stores this month for a rollout of several new premium products in February.
The upgrade has various deadlines for its franchisees, with the oldest systems having the earliest deadlines. The franchisees in the suit missed a Dec. 31, 2009, deadline.
According to FOX Business, some of the franchisees named in the suit failed to implement the new systems in order to voice their displeasure over recent Burger King decisions. Those franchisees are part of the group of Burger King franchisees that have filed suit against the company, including the most recent lawsuit regarding the chain's decision to move the double cheeseburger to the dollar menu.
From the story:
The lawsuits are further straining an already acrimonious relationship between Burger King and some of its franchisees, a factor analysts have cited as having the potential to hurt sales and restrain stock growth.
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