Burger King's $1 double cheeseburger upsets franchisees

By Joe Guy Collier

For the AJC

Burger King Corp. has aggressively pushed its $1 double cheeseburger to attract price-conscious consumers, but the chain’s franchisees say the value pricing is costing them money.

The National Franchisee Association, a Kennesaw-based group that represents more than 80 percent of U.S. franchised Burger Kings, filed a lawsuit this week against Burger King, a Miami, Fla.,-based chain, over pricing issues.

The lawsuit, filed in U.S. District Court for the Southern District of Florida, seeks to prevent Burger King from dictating maximum pricing for the franchisees.

“After attempts to compromise on maximum pricing were unsuccessful, we have been forced to pursue a judicial resolution on this issue,” said William Harloe Jr., a Maryland franchisee and NFA chairman in a press release.

Burger King said it believes the lawsuit is without merit.

"The U.S. Court of Appeals for the Eleventh Circuit decided earlier this year that BKC has the contractual right to require franchisee participation in its BK Value Menu program," the company said in a statement.

The franchisees, though, contend that Burger King does not have the right to add the item to the value menu and traditionally has received a vote of support from franchisees for changes.

The franchisees voted twice this year to reject a proposal by Burger King to add the double cheeseburger to the $1 menu, according to the lawsuit. The item costs more than $1 to produce and sell, the franchisees say.

The company, though, announced that starting on October 19 franchisees would be required to add it, according to the filing.

It's the second time this year that the franchisees have taken legal action against Burger King.

In May, the National Franchisee Association sued Burger King, Coca-Cola Co. and Dr Pepper Snapple Group over restaurant rebates from soft-drink agreements. The franchisees say that Burger King is trying to improperly divert the money for its own purposes.