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Wendy's settles lawsuit with franchisee

Editor's note: This story has been updated with Wendy's response to the settlement.

The Wendy’s Co. and its largest franchisee, WendPartners Franchise Group, have settled a lawsuit that began in July with a standoff over equipment required for the brand’s new Dave’s Hot ‘N Juicy Cheeseburger.

Terms of the settlement were not released, but WendPartners has agreed to install bun-toasting equipment the franchisor required in order to introduce the new burger, which rolled out nationwide last week.

WendPartners, a consortium of franchise groups controlled by Lewis Topper, Jeffrey Coghlan and several affiliated companies, operates 329 Wendy’s locations in 20 states. The group had initially balked at installing the toasters needed for the new hamburger line, prompting Wendy’s to file the lawsuit.

In a response to the settlement, Wendy's said: "We appreciate the commitment of the Topper organization to the Wendy’s brand and their partnership in helping to assure the success of Dave’s Hot 'N Juicy line of cheeseburgers."

Wendy’s said in court documents that the new burgers, which added incremental same-store sales between 2 percent and 3 percent in test markets, resulted from Project Gold Hamburger, which began more than a year ago. The company announced the implementation schedule for the project to its franchise system in late 2010, and won approval for those plans from the Franchise Advisory Council and the Wendy’s National Advertising Program.

Dave’s Hot ‘N Juicy Cheeseburger is one of several initiatives intended to restore same-store sales growth at Wendy’s, which earlier this year sold former sister chain Arby’s to Roark Capital Group, and most recently named as chief executive Emil Brolick, formerly of Yum! Brands Inc.

The chain is also testing breakfast in seven markets, as well as four new-store prototypes. Plans to upgrade the brand’s chicken sandwiches are already underway.

Dublin, Ohio-based Wendy’s operates or franchises more than 6,500 locations in the United States and 25 foreign markets.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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