Burger King Franchisees Dismiss Lawsuit Over $1 Cheeseburger

By dropping a two-year lawsuit, Burger King franchisees have it their way: They get more power over Value Meal pricing.

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Burger King franchisees drop lawsuit against franchisors. What do they get in return?A lengthy legal dispute between Burger King and its franchisees about a $1 double cheeseburger promotion is being dismissed, the company announced Monday. The lawsuit, filed in 2009 by the National Franchisee Association on behalf of Burger King franchisees, argued that the company's decision to price the double cheeseburger at $1 on its Value Menu hurt franchisee profits.

Based on a new agreement, franchisees will now have more input on both the pricing of Value Menu items and the duration of special deals.

The agreement is part of an attempt by Burger King's new private-equity owners, 3G Capital, to listen to and address the concerns of franchisees. "We saw this as an opportunity to resolve our differences and move forward," Steve Wilborg, Burger King's president of North America, told Reuters. "Our system is 90 percent franchised and it's important for our franchisees to win."

While value promotions are often sure-fire traffic-boosters, many of these items are priced below cost -- an issue for many of the 7,550 Burger King restaurants in the United States and Canada, who are already concerned with the rising costs of food such as beef, cheese and wheat.

Tags: 3G Capital, Burger King 1 promotion, Burger King franchisees, Burger King lawsuit, Burger King Value Meal, National Franchisee Association, News

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