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Burger King operators sue over $1 double cheeseburger
November 13th, 2009, 9:28 am · 54 Comments · posted by Nancy Luna, Staff Writer
This is the first united front made by fast-food operators who are balking at corporate mandates to push $1 menu offerings.
via Yahoo/AP NEWS: Burger King franchisees sue chain
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.
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.
Tell us: Do you think the $1 menu deals have gone too far? Or, do you want more?
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it’s totally ridiculous they’d sue over this. who goes in and orders a 99c burger (10c loss) and nothing else? not very many people. the point of it is to be a loss leader, and hope enough people (I’d guess close to half) will order the combo, or at LEAST a drink or fries, with the huge profit margin on each.
but maybe BK will go the way of the arches and delete one slice of cheese or something (McDouble). I’m sure that was made to appease franchisees. but I never wanted to eat that extra slice anyway… thus i order it.
No, that’s not how it works in the real wold. If you have a car drive through, order 12 cheeseburgers then go home and have chips and drink they bought at the grocery store, where does that leave the franchisee? Buying them dinner. Burger King has made a number of mis-steps recently indicating they don’t care about their franchisees and their lousy marketing, trying to copy Carl’s Jr.’s brilliant ideas (BK never had an original idea in their LIVES), consistently cost the people who trust them to build their business. Whenever you see a business, there are real people, real families behind them, even fast food.
fine, limit it to one per person then. Taco Bell used to limit you to ten 39c tacos - remember them?
or as I said earlier, delete a piece of cheese. problem solved.
That may be why they’re suing. The corporation won’t let the franchisees limit it in any way.
“Whenever you see a business, there are real people, real families behind them, even fast food.”
yes, and when I get a coupon for Quiznos (which happens quite frequently, they either end up in my e-mail inbox or someone drops them off at work), and no Quiznos within a 5-mile radius will take a coupon, what good is it? why would I even bother going there.
what’s the point of even being a Quiznos banner then? all of the benefits, hardly any of the risks.
by the way yesterday I had a free coupon for Chick-Fil-A 8-piece chicken nuggets with purchase of a small drink. I got it. I also ordered a small fries, came out to $3.50. this is what a normal person does with a coupon. even without the fries it would have been a good meal, but I was already there,and I wouldn’t have really felt “full” for very long (I am a 180-lb man with an average appetite).
when there’s a coupon, they also hope you’ll bring a friend who doesn’t have a coupon. that’s how it works. and these BK franchisees surely knew that BK would be offering a dollar menu when they signed on.
Same here! I had a bunch of coupons for chik-fil-a, and I would get the sandwich make it a delux and get a coleslaw and drink. That is how they make money.
Quiznos coupons aren’t worth the paper they’re printed on…………I used a coupon one time on a sandwich where cheese was included………when I got my receipt they charged me for cheese……….they gave me some cock and bull story the coupon price didn’t include cheese………..I told the clerk I was going to complain to their corporate office and she opened the cash register and gave me my money back………
I’m done with Quiznos………..
Whenever I hear the drive through order in front of me at McDonalds, it seems to ALWAYS be dollar menu items alone.
I understand the operators concern, they KNOW these cheap burgers are going to cut into sales of whoppers. Carl’s already walks this line by having a $1 quarter pound burger for years, but ZERO promotion. I bet most Carl’s customers have no idea what the “Big Hamburger” is.
But, McDonalds seems to be making money at this, even though they know it’s cutting into sales of more expensive burgers.
yes it’s almost impossible to even find on the menu! so, good for them.
and the way McDonald’s makes money is by selling the McDouble at a very tiny profit (or none at all in high-rent areas). it’s basically a break-even item.
I for one almost always order from the value menu. The best ones being Mickey D’s,WEndy’s and I guess BK. I’m ashamed to admit this but once I even drove off at McDonalds when they told me the chicken mcnugget promotion had ended! The reality is everything is too expensive,including fast food. BK is average at best as it is and the only reason I go there is to buy the DC and a value menu fry. I agree they should just eliminate 1 slice of cheese. But all these ff places are greedy and trying to rip off their tight fisted customers. Wendy’s value items keep creeping up!
Making a profit like all businesses isn’t being greedy. Cost of most everything has gone up and so has consumer spending.
how are they ripping off their customers if they’re LOSING money selling a $1.00 cheeseburger??
I sure of heck have knowledge about Carls ‘Big Hamburger’. Like the REAL damn name of the sandwich is “OLD TIME STAR”. I miss Happy Star sandwiches as well. When broiled, they crisped up around the edges…yum.
heck I remember when the Famous Star was 99c and that wasn’t really even that long ago. a Famous Star with Cheese was $1.09
now what does a Famous Star go for, $2.99?? gimme a break! rip off
Isn’t their an insane mark up on Soda? They can make their money back there.
I was just thinking this the other day; especialy on take-out/drive thru as you won’t be coming back for a refill.
i think you’d be surprised at how many people order one or two of these $1 sandwiches and a water and nothing else.
Whenever I’m forced to dashboard dine I do………….I’m not eating for enjoyment I’m strictly eating for fuel……….
But at the same time, isn’t the double cheeseburger the only menu item losing money? (An assumption on my part)
So in other words, even if a poor student comes in to get a double cheeseburger, whopper junior, and that 99 cent chicken sandwich with a cup of water, they’re still making enough to at least break even.
If that’s the case, I don’t see what the problem with selling a single item at a loss.
again, why should a business owner be forced to lose money on anything on the menu, regardless of how many the sell? i know that supposedly its so they can “compete” with the other fast food restaurants, but long term that is a losing business strategy. it can’t be sustained and the franchisees are right. ultimately they will prevail whether in court or some other agreement.
i know that after work, i’ve gone to bk and gotten a couple 2x cheeseburgers only. the only reason i actually go to bk is because of the good deal.
although i would still go if their 2x cheeseburgers were 1.19 or 1.29. still not a bad deal.
As said, they make up their money on the soda and other items. Those double-cheeseburgers aren’t worth more than a buck to me, anyway. I’ll deal with the squished together burger for that price, but not for more.
soda or not, why should a business owner be forced to squeeze $1.10 out of a dollar?
because it’s a bad economy and if they want to stay competitive they’ll do it, or come up with some better suggestion if they want to stick it to corporate.
that’s not a great business model, nor one that will last very long. businesses have been trying to squeeze $1.10 out of a dollar since the 1950s. and every time a business tries, they ultimately fail. BK will have to devise a better business model than this, but ultimately the franchisees are right about this and they will prevail.
also, that’s not staying competitive, it’s gradually putting them out of business. being competitive would be for BK to offer a product that people are willing to pay = the cost of goods.
but i think the bigger story here, and one the writer barely touched on, is that that double patty burger with cheese and bun, pickles, ketchup and mustard only costs the company 55 cents in materials. that is the level of crap that all of you are eating when you eat that thing.
Ugh, you’re right, hooten. I picked the wrong night to try one…now I just feel grosser thinking about that high-quality meat coursing on through…
Hell yeah I always just order $1 value items & NOTHING ELSE. We have thousands of fast food chains that hire illegal’s I don’t believe in helping the billion corporations in maximizing their profits. I’m just taking back from what they have been taking from me. If you’re stupid enough to pay $2 for a large soda that costs 15 cents to produce, that’s your problem.
I don’t believe any of these fast food company’s “execs” know how to change. People are on the go. I don’t need a huge burger slopping all over me in my car. I don’t need 50 fries and an oversized drink.
tell them, what do you need?
I think I said it.
not really. you said what you don’t need, but never said what you do need.
This sounds kinda gross but I actually know some guy who buys a lot of these burgers than freezes them to eat another day. Now that is extreme. I feel for the franchisees they are at the mercy of the corporation when it comes to deals like this.
I have to say though that I am guilty of buying a burger from the value menu and nothing else. Who needs the fries and soda, this junk is gonna kill you anyways.
“Not me, but a buddy of mine…”
I tried to order 2 of those things last week w/o cheese. I was told if I did it would be $2.69 each or something like that. It was take the cheese or ‘no deal’.
Since I can’t stand fast food cheese I just ordered a whopper w/o mayo instead but I can see the franchisee’s point. Even buying a soda and FF
doesn’t leave a lot of profit margin when you just sold 2 double cheeseburgers at a loss.
good point. for every cheeseburger they sell, they need to make up at least 10 cents on other things. sell 4 burgers and you’re looking at having to make up 40 cents on the order. and that’s the minimum since the franchisees are saying that it costs at least $1.10 per cheeseburger. and why should a franchisee in nyc or la have to charge a buck? it’s certainly more expensive to do business there than it is in the middle of nowhere.
in that case, they should make it participating franchises only which is the case with many offers.
or if someone can demonstrate it costs much more where their store is, let them sell it for $1.25. or make it for a very limited time only, to help drive more foot traffic.
absolutely. i think mcdonald’s lets their franchisees do this. at malls and airports, the prices seems to be higher or they don’t offer the $1 menu at all. that’s why i think the franchisees are going to win this one in the long run. you can’t force a business to lose money.
These franchisees can always sell their franchises if it’s so hard to deal with the know-nothing franchisers. It sucks having a national brand name and advertising behind your small business, huh?
As other have pointed out, many customers will purchase additional, more profitable items with their value menu item. Or, other people in a group will buy more expensive options. A friend of mine frequently orders off of value menus, while I order something else. If Restaurant A has no value menu, my friend will insist we go to Restaurant B. Some people will decide they like Restaurant B and forget all about Restaurant A, even after the economy picks up.
A $1 cheeseburger (or any $1 item) sounds good to people like me who’ve lost their jobs, and are struggling to get by. But now the guys selling it are struggling as well? This might be the last straw that leads to Americas destruction! Thanks Burger King!
Why is anyone eating this crap? Don’t eat at these places. Eat at home! If you can’t eat at home, then eat at Costco. At least they have good food that is cheap. Plus they are everywhere. Even in Hawaii.
If you’re opposed to fast food, why are you reading this blog?
Do you mean for us to go to Costco and eat the samples they hand out? Or do you mean go to Costco and eat the pizza, hot dog and that chicken sandwich thing?
frozen food? that isn’t always healthier. And value menus are usually for less wealthy .. costco requires membership and buying in bulk.
I think she’s clearly talking about the food court (and any samples they happen to be giving out that day).
a few Costcos their food court is actually outside the store. you can just walk up and order whether you have a membership or not. when I was a starving college student, I did this all the time. or if it’s inside, say you’re going to the membership desk then go to the food court.
once I bought 2 double cheese @ BK for 99 cent each and added bacon. My order went from 2.17 to 3.74 real fast!
I cost BK even more. I use a Debit/credit card sometimes. I think they get dinged a quarter or more when you use plastic. Two dollar menu items, cup of ice water and I pay with plastic. I don’t feel bad about it!
So, you’d rather the financial institution make a profit than BK, eh? You’re sticking it to the wrong company.
great attitude for the future of america. maybe we’ll be like mexico within my lifetime after all.
what kind of lowlife (not only) never has $2 cash on them, but intentionally sticks it to a small business owner (franchisee) just in the interest of making Visa or Mastercard richer. now that’s just dumb
I would guess there is language in the franchisee’s agreement with Corporate that says they will order a minimum number of pounds of beef per month. If additional beef is ordered (due to corporate mandated deals) then Corporate wins twice while the franchisee loses twice. Perhaps when a franchisee sells a set number of cheaply advertised burgers, then Corporate begins to take the loss after that.
The whole point of a value menu is to lure patrons that shop rivals value menus, The hope is to bring in foot traffic and thus maybe a loyal customer that may (or may not) order additional items at regular prices, Thus creating sales that otherwise may have ever happened. Corporate is not stupid, They know they need to follow value menu trends and spend a lot of time and effort in following their rivals promos in order to stay competitive, You will lose a little at first and gain from promotions, But through marketing studies and well thought out promotions you gain foot traffic and should benefit in the long term in sales from these promos that bring back the “Buzz” to your business, They may not always work as everyone has had some goofs in the past.
I already sense some annoyance on the part of the BK workers. Unfortunetly I’m sick and was not able to enjoy my DC today,but anyway, not even 2 seconds of me ordering the order taker asked if I wanted bacon/a drink with that! And she seemed a little miffed when I said no!
BK owners will easily make up the .10 shortage with the sodas they sell at HUGE markups in relation to what they pay for soda concentrate etc.