Burger King, franchisees drop soda-rebate lawsuit

Soda rebates are based on the amount of soft drink syrup a franchisee buys and are designed to cover the cost of equipment and local marketing efforts. Such funds can be a lifeline for franchisees, who have seen their profits squeezed when their parent companies offer low-priced meals like $1 burgers to lure cash-crunched diners into stores.

http://www.reuters.com
March 5, 2010

Burger King, franchisees drop soda-rebate lawsuit

LOS ANGELES, March 5 (Reuters) - Burger King Corp (BKC.N) and its franchisees have agreed to dismiss a lawsuit over the millions of dollars in rebates restaurant operators get from soft drink suppliers, the hamburger chain said on Friday.

Burger King in February paved the way for the agreement when it said it did not plan to take a portion of the rebates, which are given to franchisees by suppliers like Coca-Cola Co (KO.N) and Dr Pepper Snapple Group (DPS.N), to help pay for a larger national advertising campaign.

Burger King, which has been working to improve strained relations with franchisees, said it worked with franchisees on a new strategy for boosting the fast-food chain's national advertising fund.

Soda rebates are based on the amount of soft drink syrup a franchisee buys and are designed to cover the cost of equipment and local marketing efforts.

Such funds can be a lifeline for franchisees, who have seen their profits squeezed when their parent companies offer low-priced meals like $1 burgers to lure cash-crunched diners into stores.

Shares in Burger King were up 9 cents to $17.89, or less than 1 percent, in afternoon trade on the New York Stock Exchange. (Reporting by Lisa Baertlein, editing by Gerald E. McCormick)

http://www.reuters.com/article/idUSN0523848620100305


Risks: 30 different programs of kickbacks, shelf allowances and inside money, Advertising fund use disagreements, Rebate sharing, United States, 20100305 Burger king

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License