|
|
The Carthage Press
  • Franchise woes for seven Mo. Burger Kings

  • Franchise fees
    • email print
  • The Burger King Corp. is alleging the owner of seven Missouri franchises, including the one in Moberly, failed to pay franchise fees and is asking a federal judge to stop the operator from continuing to sell Burger King-branded products.
    The Miami-based fast food restaurant filed a federal lawsuit Jan. 28 against Joseph R. Gunther and Vicki Gunther of Lake Saint Louis and the various companies the Gunthers use to operate their franchises.
    The Gunthers own and operate three Burger Kings in Columbia, one in Jefferson City and one in Moberly, according to the lawsuit filed in the Southern District of Florida. They own another two in O'Fallon.
    According to a spokesman at Burger King in Moberly, the business is open and adds, the only reason Burger King in Moberly has been closed is because of the weather.
    It is reported the Gunthers and their companies failed to make their franchise payments last year, and Burger King notified them they were in default Oct. 24, the company said in the lawsuit. If a franchisee fails to make its missed payments, franchise agreements automatically terminate 90 days after the operators are given notice they have breached the agreement. The franchises were terminated Jan. 25, the company said, and the operators are required to remove Burger King signage and cease selling Burger King food.
    Burger King "is no longer the source or sponsor of the restaurants and does not endorse said restaurants, or the products and services provided therein, has not authorized defendants to use the" Burger King "marks to identify the terminated franchise facilities, products, or services and has
    Burger King Corp. is asking for preliminary and permanent injunctions against the Gunthers and their companies from selling Burger King-branded food and merchandise. The company also wants the unlicensed restaurants to cease identifying themselves with the Burger King brand and allow Burger King employees to enter the premises to make changes "necessary to distinguish the premises from their appearance" as Burger Kings. The company also is seeking revenue the restaurants made while operating outside of the franchise agreements and punitive damages.
    A spokesman for Burger King said the company does not comment on pending litigation but said it is unlikely the restaurants would close. Burger King Corp. is more dependent on franchisees than competing fast-food chains, the company wrote in its most recent earnings report filed with the Securities and Exchange Commission. In the United States and Canada, the corporation owns only 183 restaurants, while it franchises nearly 7,300. Franchise fees typically cost operators 4.5 percent of gross sales and another 4 percent for marketing activities, according to the company's annual report.

        • »  EVENTS CALENDAR