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When the Langley family opened a breakfast-anytime restaurant in a former IHOP building, A-framed blue roof and all, they thought it would be cute to name the restaurant “It’s Hop’n.” IHOP wasn’t laughing, and lawyers quickly hopped to a lawsuit, filed in federal district court in Greensboro, North Carolina. According to this article, the Langley’s did not take a lawyer’s cease and desist letter seriously, but – after being served with the lawsuit – they now understand that IHOP means business. They have decided to change the name of the restaurant to “Langley’s Pancake House,” but they refuse to change the color of the roof. . .
Effective April 21, New York City restaurants that have more than 15 outlets across the county must post calorie content on their menus. The New York State Restaurant Association challenged the City’s rule in court, but a federal judge last week rejected that challenge. According to Judge Richard Holwell, the City’s rule is a reasonable approach to the goal of reducing obesity.
Midas, Inc. has acquired the assets of G.C. & K.B. Investments, Inc. and its affiliates, the franchisor of 181 SpeeDee quick-lube and automotive maintenance shops in the United States and Mexico. SpeeDee’s U.S. retail sales are comprised mostly of oil changes and other fluid replacements, with brake services serving as a small component of its business. In contrast, brake services account for nearly 40 percent of sales at a typical Midas shop, with only six percent sales in oil changes and other fluid replacement services. According to this article, the acquisition is part of a co-branding strategy, and the company plans to add Midas brake services to existing SpeeDee locations.
After pulling a prank that led customers to believe the Whopper was dead (see earlier blog posting), Burger King has announced plans to open smaller restaurants called the Whooper Bar that will be focused on its top-selling sandwich. According to this article, the Whopper Bar will have fewer items on its menu than regular Burger King locations and will be located in areas with little space such as airports, casinos and strip malls, Burger King plans to introduce the concept to franchisees in May and hopes to open several franchise and company-owned stores by the end of this year.
According to this article, Wendy's International recently signed franchise agreements to open 60 new Wendy's restaurants in Mexico City and Monterrey, Mexico. The restaurants will open over the next seven years, with the first restaurant expected to open by the end of 2008.
As reported in earlier postings, Dairy Queen franchisees continue to protest International Dairy Queen’s plans to convert existing locations to its new DQ Grill & Chill or DQ/Orange Julius concepts. Texas has more Dairy Queens than any other state, with 600 restaurants. DQ restaurants in Texas use a separate menu branded as Texas Country Foods, which has the trademark rights to Hunger Buster and Belt Buster burgers. Because Texas uses a separate menu under Texas Country Foods, its franchises could not adopt the Grill & Chill menu. But American Dairy Queen wants Texas restaurants to adopt the larger restaurant format. According to this article, at least one franchisee in Kemah, Texas fears the plans will put him out of business.
Chalk one up for Quiznos in the flurry of franchisee lawsuits it has recently faced (see earlier blog postings). A district court judge in Illinois has dismissed antitrust claims from six Illinois franchisees. The complaint alleged that the franchisees were forced to buy supplies at higher prices from Quiznos or its approved vendors with the profits funneled back to the corporation, and that the company set retail prices too low to enable the franchisees to make a profit. According to this article, U.S. District Court Judge Rebecca Pallmeyer dismissed the claims, noting that each of the franchisee plaintiffs had signed agreements identifying business risks and outlining the details of the company's practices. A federal judge in Wisconsin dismissed a similar lawsuit in November and a third was voluntarily dismissed last year in Michigan.
According to these articles [link to 2 articles], franchisor Burger King Corporation has joined its franchisee in settling a claim brought by the family of a franchisee’s employee who was slain at a Burger King restaurant. The employee was killed by a former maintenance worker with a felony record. The family’s lawyer received one-third of the settlement, which was paid by the companies’ insurance company.
As discussed in earlier postings, Quiznos has had its share of franchisee legal disputes. According to these articles, one of the most recent is a newly-filed class action complaint in Wisconsin’s Milwaukee County Circuit Court alleging violations of the State’s consumer protection laws. The class action filing follows a November 5, 2007 Wisconsin federal court ruling dismissing the franchisees’ claims in that court for lack of federal jurisdiction. The mover behind the new filing appears to be the Toasted Subs Franchisee Association Inc., an independent association of Quiznos franchisees known for its penchant for suits against the Quiznos franchisor.
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