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NFA files class action suit against Burger King
May 10, 2009
Blue MauMau: Burger King's National Franchisee Association has filed a class action suit on behalf of all franchise owners against Burger King Corp. and its two drink distributors, Coca Cola and Dr Pepper. The lawsuit takes issue with Burger King's unilateral decision to strip the franchisees of their right to a substantial percentage of the Restaurant Operating Funds and appropriate those funds to Burger King's designated use, at a loss to the franchisees. Burger King Corp.'s intention is to divert to itself up to 40 percent of funds owed to the franchisees under the soft drink agreement, effective February 2010.
The dispute is over whether franchise owners are the intended beneficiaries under the soft drink agreements, and in particular, the obligation of Coke and Dr Pepper to pay the funds to franchisees; and whether BKC and the drink distributors can arbitrarily change the agreement to divest the franchisees of their rights in order to qualify for full entitlement of the soda funds.
Read also, Burger King to increase U.S. ad spend in 2010.
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