Anyone See A Correlation Between This And 'Trials'?

[Lee]

CHICAGO — Burger King franchisees sued the hamburger company this week over its $1 double cheeseburger promotion, saying they're losing money on the deal and the company can't set maximum menu prices.

The National Franchise Association, a group that represents more than 80 percent of Burger King's U.S. franchise owners, said the $1 promotion forces restaurant owners to sell the quarter-pound burger with at least a 10-cent loss.

While costs vary by location, the $1 double cheeseburger typically costs franchisees at least $1.10, said Dan Fitzpatrick, a Burger King franchisee from South Bend, Ind. who is a spokesman for the association. That includes about 55 cents for the cost of the meat, bun, cheese and toppings. The remainder typically covers expenses such as rent, royalties and worker wages.

"New math, or old math, the math just doesn't work," Fitzpatrick said.

After testing the $1 deal in markets across the country, the discounted burger went on sale nationwide last month even though franchise owners, who operate 90 percent of the company's 12,000 locations, twice rejected the product because of its expense.

"The current management team has disregarded rights that Burger King franchisees have always had," Pennsylvania franchise owner Steve Lewis said in a statement.

Denise Wilson, a spokeswoman for the nation's No. 2 hamburger chain, said the Miami restaurant company believes the litigation is "without merit," particularly after an earlier appeals court ruling this year showing the company had a right to require franchise owners to participate in its value menu promotions.

Restaurants, especially fast-food chains, have been slashing menu prices because of the poor economy. Executives hope the deeply discounted deals will bring in diners who are spending less when they eat out, or opting to stay home altogether.

When the $1 double cheeseburger was announced this fall, analyst said it could increase restaurant visits by as much as 20 percent. But despite that boost, a Deutsche Bank analyst said as much as half of the gain recorded from increased traffic could be lost because customers were spending less when they ordered food.

The lawsuit was filed Tuesday in U.S. District Court in Southern Florida.

Burger King shares fell 18 cents, or 1 percent, to close at $17.12 Thursday.

http://www.google.com/hostednews/ap/...gzHZwD9BUB0181

I thought this was a pretty interesting news piece, especially given the loss being made by franchisees... Its actually pretty spot-on with what happens at PPS affiliate programs who pay their affiliates $XX amount for a $1 trial.

Regards,

Lee

[hotdudesnude]

I can see where there may be a similarity,

The hope is that they will spend money on something else while they are there, for example a soda to drink with their one dollar burger. Soda sales are almost pure profit, they only pay a few pennies per drink and sell it for much more than their costs, the cup probably cost more than the drink in it.

PPS programs are banking on rebills.

BK is not hurting, and in this economy people are eating there more than ever, because it's cheap.

This whole PR about the losses sounds like someone is trying to drop the stock share prices so they can swoop up a bunch of cheaper shares to make some fast money on the rebound at the end of the quarter when they announce their record sales and profits. Companies pull this crap all the time. They love to use the media as TOOLS to manipulate their stock prices.

I am predicting that all the fast food companies will be making huge bank this quarter as families try to save money on food to spend on the hollidays.

You couldn't pay me to eat fast food anymore,
The service sucks,
They never ever get the order correct,
I always feel ill after and get hungry about an hour later.

[Squirt]

It just shows how greedy these mother fuckers are.. all over 10 cents.. really? Like people wont buy a coke when they get a burger where they make 300% profit on the drink.. I mean seriously?

Never trust a corporation to give a shit about the consumer