I’ve been wondering how some fast food chains can sell $1 cheeseburgers and still make a profit. Apparently they can’t, which is why a group that represents about 80% of the restaurant’s franchisees have sued the company over the promotion.
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 [National Franchise Association]. That includes about 55 cents for the cost of the meat, bun, cheese and toppings. The remainder typically covers expenses such as rent, royalties and worker wages.
Unlike some other restaurants where your local franchise will just refuse to participate, Burger King requires all of its locations to take part in the promotion.
They may face an uphill battle, though. MSNBC notes that “an earlier appeals court ruling this year [showed] the company had a right to require franchise owners to participate in its value menu promotions.”
“Burger King franchisees sue over $1 promotion” [MSNBC] (Thanks to Howard!)