Elaine Walker reports in the Miami Herald that Burger King’s franchisees say they no longer “trust” or “have confidence” in current management, so they’re going directly to the company’s board of directors with their complaints.
That was the message in a letter sent by the National Franchisee Association last week to Burger King’s board of directors. The board needs to take action to repair the relationship with franchisees, which has disintegrated to a level unheard of even for Burger King, the letter said.
“Your management team has pushed the franchise community to the brink,” said the letter signed by 27 franchises, including the NFA board and the heads of 21 regional franchisee associations. “We are taking this extraordinary and historic action to communicate our concerns directly to the board.”
The letter is another salvo in a battle between Burger King and its franchisees that erupted last week after the NFA filed its second class-action lawsuit against the chain in the last six months.
The NFA represents more than 80 percent of franchisees.
The suit argues that Burger King does not have the authority to “dictate maximum pricing.” The motivation for the suit is Burger King’s decision to require franchisees to sell the double cheeseburger for $1.
The NFA also sued Burger King in May to stop the chain from getting its hands on a portion of the millions of dollars in annual rebates that franchisees receive from soda companies.
In the letter to the board, franchisees characterize management’s actions on these issues as “reckless and dangerous.”
“There has been a comprehensive failure by BKC Management to develop a competitive menu necessary for our business to be successful,” the letter states.
Burger King management issued a statement to The Miami Herald saying the letter “mischaracterizes” the double cheeseburger promotion and the company’s performance. The company claims the cheeseburger has been “delivering a solid performance,” in line with the increased traffic and profitable sales during an 18-month test.
Management points to achievements like its six years of worldwide same-store sales increases and addition of more than 800 net new restaurants.
“BKC takes great pride in our franchise system and the actions we have taken to enhance our competitive position,” the statement said.
Related reading at DDIFO.org: Burger King’s $1 Double Cheeseburger Upsets Franchisees
Other Related Reading at AllBusiness.com: How Burger King Cooked Up a Franchise Rebellion
Other Related Reading at Blkue MauMau: Burger King Franchisees Take Complaints Directly to Board of Directors