News

California Burger King franchisees in spat with corporate

October 7, 2010

More than 50 Burger King franchisees in California are in disagreement with corporate headquarters over a $5 million lawsuit.

The lawsuit claimed 10 restaurants in the state were not properly accessible for wheelchairs or scooters.

According to Courthouse News Service, the corporate office demanded about a $35,000 payment from each franchisee to help pay for the settlement. Burger King sent a letter to each franchisee outlining the request for them to "acknowledge their responsibility" in the case, and also requested additional help for reimbursement of the $2.5 million in attorneys' fees.

Franchisees argue this demand violates their franchise agreement and have asked the court to find the corporation responsible for the claims in the class action.

From the story:

The franchisees say Burger King cannot demand that "franchisees whose restaurants were never visited by class plaintiffs" pay the corporation's $7.5 million bill for class damages and attorneys fees.

Citing paragraph 13.C of the franchise agreement, the franchisees say, "Based on this provision, franchisees are not required to indemnify BKC in the event of BKC's negligence, which was the essence of the claims in the Castaneda suit."