NEW YORK A Burger King franchisee here has sued the Miami-based franchisor in federal court, marking the latest volley in an ongoing legal battle over the chain's value menu.
The franchisee, E-Z Eating Corp., has said that Burger King's value menu made it impossible to operate in the high-priced market of Manhattan.
Last month, Burger King shut down E-Z's two remaining stores in midtown Manhattan after the franchisee closed two other stores without its permission and thereby breached the franchise contract.
E-Z countered by filing a lawsuit, saying the chain is interfering with its lease rights. E-Z’s attorney, Oliver Griffin, said the franchisee is seeking damages for the rent that E-Z owes on a nine-year lease for one of its locations. The rent for that location is $18,000 a month.
“They could barely make the lease payments before this cockamamie value menu,” Griffin said.
Griffin said the value menu's low prices prevented the franchisee from turning a profit.
“The value menus might work in Kansas but not in Manhattan,” he said. “If a Whopper costs $3.50 in Manhattan and a customer can buy two Whopper Juniors for $2 with a value meal, the operator eats that $1.50 difference.”
Burger King did not comment for this article, but the company has reportedly said the franchisee's claim is unfounded and that its internal studies show the value menu promotions actually boost store profits.
The franchisor and EZ have sued each other repeatedly since August 2006. EZ filed an action at that time, alleging the value menu killed three of the franchisee’s units. Burger King subsequently sued for non-payment of royalties, prompting another suit from EZ.