Franchisees sue Burger King over $1 burger

MIAMI, Nov. 12 (UPI) -- Burger King Corp. franchisees have gone to federal court in Miami, saying they can't afford the fast-food company's $1 double cheeseburger promotion.

The National Franchisee Association's lawsuit, filed this week in U.S. District Court, contends franchisees are losing money on each burger they sell at that low-ball price. The Miami company, the suit says, doesn't have the authority to "dictate maximum pricing" of the food the restaurants sell, The Miami Herald reported Thursday.

The franchisees voted twice last summer against the promotion but Burger King implemented it in October anyway.

The Atlanta Journal-Constitution reported Burger King labeled the lawsuit as meritless.

"The U.S. Court of Appeals for the 11th 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.

Courthouse News Service reported the franchisees say they lose 10 cents on each cheeseburger. Burger King expects the franchises to make up for the loss with increased purchase of high-margin menu items such as french fries and soda.

Burger King Chief Executive Officer John Chidsey recently told analysts he was encouraged by the initial numbers from the burger promotion.

The franchise owners say Burger King is trying to boost sales to keep Wall Street happy at their expense.