Burger King Franchises - Relations - United States - Hours of Operation

Hours of Operation

In 2007, Burger King announced its "competitive hours" requirement that mandated locations extend their hours of operation to midnight for most of its American locations. Burger King's reasoning for the changes were necessary to maintain a competitive stand against McDonald's and Wendy's. Burger King stated that roughly 60% of its franchised locations already operated until mid-night, but it sought to have the extended hours of operation cover 100% of locations in order to begin a nation-wide advertising campaign promoting late-night sales. On June 1, 2008 the company amended the directive to require restaurants to stay open until 2:00am Thursday-Saturday and open at 6:00am Monday-Saturday. At the time of the announcement, Burger King stated it believed the franchise agreement allowed it set minimum hours and that most of it franchisees had agreed to the extended hours of operation. After the deadline passed, Burger King notified its franchises on July 3 that if any of them failed to implement the new policy by July 8, the franchises would be in default of their agreement.

Many franchises opposed the extensions on multiple grounds; operators claimed employee and customer safety was jeopardized by the extended hours, with several Miami-area franchises noting incidents in 2006 and 2007 where staff or customers were killed during extended hours. Additionally it was claimed that the extended hours were not profitable due increased costs associated with operating the locations at times with lower customer traffic and subsequent lower sales. Franchises and the NFA noted the franchise agreement only required locations to be open until 11:00pm and did not contain riders that allowed the corporate parent to amend the agreement. In response to the changes, three Miami-area franchise filed a suit in July, 2008 with the Eleventh Judicial Circuit Court of Florida in Miami to stop the change and force the company to make it optional instead of required. The NFA issued a statement that it "unequivocally supported" the suit, and that "...the franchisor does not have the enforceable right to mandate extended hours."

Circuit Judge Jon I. Gordon dismissed the lawsuit without prejudice in November requesting the plaintiffs refile with a clarified complaint. An amended complaint was filed by the three franchises a month later. In response to a motion to dismiss filed by the parent company, the judge ruled in January, 2009 in favor of Burger King. In his decision, Judge Gordon stated that the franchise contract clearly does provide Burger King the right to establish minimum hours standards for its franchises. After purchase of the company by 3G, Burger King conceded to the franchises request the mandate be changed to a recommendation and relaxed its position on the extended hours.

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