The Wall Street Journal is reporting on trouble in the Kingdom.
Burger King is trying to tap up to 40% of the syrup-rebate funds that all stores receive in order to increase its national advertising presence next year at a time of fierce fast-food competition.
National Franchise Association Inc., which represents over 75% of Burger King’s U.S franchise operators, says that franchisees will lose hundreds of millions of dollars over the next decade as the parent company uses long-standing funds the operators had received for advertising.
The issue may be decided in court, as two complaints filed by franchise operators on May 4th in U.S. District Court in Southern California are seeking class-action status.
Whatever happens in or out of court this is a red flag for BK. When your day-to-day street team feels put out by the suits at corporate, it’s time to eat (and invest) elsewhere.