Tags: Mcdonalds | Germany | franchise | dispute

McDonald's in Spat With German Franchisees

Thursday, 28 Jan 2010 09:56 AM

McDonald's Corp.'s German unit is engaged in a dispute with several franchise holders who accuse the world's largest hamburger chain of using aggressive tactics to try to force them out of their contracts.

Court records show McDonald's hired a team of private detectives to dig up evidence of conflicts of interest against one of the franchisees.

In other instances, at least five franchisees say, McDonald's offered corporate jobs to franchise employees in exchange for information needed to terminate franchise holders' contracts or ordered its personnel auditors to collect evidence against them.

The restaurant operators say these methods are part of a broad campaign by McDonald's in Germany, one of the company's biggest markets, to reclaim stores held by franchisees and to slow unit growth in a country saturated with fast-food outlets, an allegation McDonald's denies.

Ulrich Bissinger, senior director of McDonald's German legal department, confirmed that the company hired detectives to monitor one franchisee.

On Wednesday, that franchisee said he would forfeit his four restaurants to McDonald's Germany because he couldn't afford to post a security bond of about €4 million ($5.6 million) required to continue litigation against the company.

Mr. Bissinger denied that McDonald's was terminating franchise contracts as part of a new business strategy. Its motive, he said, was "to protect its franchise system" from partners it believes violated its contracts.

Heidi Barker, a spokeswoman at McDonald's corporate headquarters in Oak Brook, Ill., said the use of detectives was "an extremely uncommon occurrence that does not reflect the broader practices of McDonald's Germany nor those of McDonald's."

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McDonald's Corp.'s German unit is engaged in a dispute with several franchise holders who accuse the world's largest hamburger chain of using aggressive tactics to try to force them out of their contracts.
Mcdonalds,Germany,franchise,dispute
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2010-56-28
 
 

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