What do you think of Dollar double cheeseburger leads to food fight between Burger King, franchisees?

CHICAGO (AP) -- 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 as well as 45 cents that 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 $17.12 in Thursday trading.

http://finance.yahoo.com/news/Food-fight鈥?/a>What do you think of Dollar double cheeseburger leads to food fight between Burger King, franchisees?
Cheap unhealthy food like $1 double cheeseburgers are what is driving obesity in America. Let's get some cheap healthy food for a change. After saying that, I think burger king has a long way to go to compete with McDonald's but if they can do it, why can't Burger King? That's the real question.What do you think of Dollar double cheeseburger leads to food fight between Burger King, franchisees?
This was the second time which franchisees were really mad. Initially, BK mailed out coupons ti try to compete with McD and Wendys. This just indicates that their costs are too high to begin with.What do you think of Dollar double cheeseburger leads to food fight between Burger King, franchisees?
Sounds like we better enjoy this while it lasts. This is a great for customers though
Sounds like the complaint is reasonable, but I have no sympathy for fast food vendors.



Businesses often sell promoted items at a low or negative profits to bring in customers. In this case, BK is banking on the hopes most people will buy additional items, such as fries and a drink - which have a much higher profit margins.



A large soda costs the company maybe 25 cents- with most of that cost being the cup. That's why the offer free refills.