In Germany we have witnessed an increasing number of closures and insolvency proceedings in connection with Burger King restaurants.
These insolvency proceedings or closures have not only affected the franchisees but also those who invested in the costly construction and equipment of the Burger King restaurants.
These restaurants were predominantly built at locations that had been endorsed or even recommended by Burger King management.
After a multitude of discussions with franchisees and investors, we are left with the impression that Burger King would like to reduce the number of franchisees and investors while maintaining the same number of restaurants or even increasing it.
How can this be achieved? By dissolving franchise contracts and by then distributing the licenses that come available to a few ‘regional bosses.’ Similarly for investors: locations are contracted out to selected investors that already run multiple restaurants.
The franchise owners we spoke with have reported “arbitrary” and “excessively” critical inspections of their restaurants that have culminated in an extraordinary termination of their franchisee licenses and thereby resulted in the loss of jobs and the personal ruin of the aggrieved franchisee.
Also affected are investors who were suddenly confronted with a severe loss of rental income and the collapsed financing of their investment after the extraordinary termination of their franchisee.
Considering this information it seems downright cynical that a British investment firm with the name of “Justice” has acquired 29 percent of Burger King’s shares. Together with the other shareholder, the 3G Capital, “Justice” went public with Burger King at the New York stock exchange.
Incidentally, a cofounder of Justice is Karstadt owner Nicolas Berggruen who likes to pass himself off in the media as a socially conscious investor. (See ZDF television documentary of the program Zoom+ from 4.29.2012, „Mister Karstadt – Der rätselhafte Nicolas Berggruen“(“Mister Karstadt —the mysterious Nicolas Berggruen”)
In cooperation with a large international law office, franchisees and investors are now preparing to take action against Burger King because they feel cheated regarding the yield expectations that had been promised them.
We are seeking other former or currently active investors and franchisees who feel deceived by Burger King and who are interested in sharing their experiences and information with us. This information would be incorporated into the current proceedings.
As a matter of course, all information and evidence will be treated with the strictest confidence.