News, Food fight: Burger King franchisees sue chain. (expenses, company, money)

[JD59]

CHICAGO (AP) -- Burger King franchisees sued the hamburger company this week over its $1 double cheeseburger promotion, saying they're losing money on the deal and the company can't set maximum menu prices.

Food fight: Burger King franchisees sue chain - Yahoo! Finance (http://finance.yahoo.com/news/Food-fight-Burger-King-apf-1338962807.html?x=0&.v=5 - broken link)

[user_id]

Just from roughly adding the costs, its pretty obvious the ingredients are less than $1. Of course the franchisees are using some sort of funny logic:

"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 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."

Rent is a fixed cost, and royalties and worker wages are also at least partially fixed. Are they hiring new employees just to handle increased volume from the sale of these burgers? Probably not.... The (stupid) franchisees are probably trying to amortize their rent, labor costs etc per burger. Yet, the important question is the marginal cost to produce another $1 cheeseburger. Hard to see why it would be $.45 beyond the ingredients. This is not to mention that these are suppose to be a loss leader.

I can't even think of a Burger king that is not dirty and nasty, perhaps one of the worst fast food places.

[texdav]

Sounds to me like they need to open a independent burger joint;silly suit IMO.

[Mike from back east]

McDonalds's here in COLO SPGS is charging $1.15 for a double cheeseburger, bought one last night.

I hate dollar menu's, these low prices are achieved at the expense of people being paid wages far too low for them to live on nor are there any employee benefits. I only visit these places once a month or so, much prefer getting a bison burger at Ted's Montana Grill.

[user_id]

Originally Posted by Mike from back east

I hate dollar menu's, these low prices are achieved at the expense of people being paid wages far too low for them to live on nor are there any employee benefits. I only visit these places once a month or so, much prefer getting a bison burger at Ted's Montana Grill.

The dollar menu prices are not the cause of McDonalds low wages, McDonalds would provide low wages regardless. The wages are controlled by the supply/demand in the labor pool. There are a large number of unskilled workers out there as a result they are not able to command a high salary.

But regardless, McDonalds can offer to pay higher wages and provide a dollar menu. It would come at the expense of their share holders and upper management. Although, they don't have a dollar menu per se In and Out burger in on the west coast is bit a cheaper than McDonalds yet they starting pay for their workers is a good $2~$3 higher than McDonalds. But its a private company.

[Mike from back east]

Originally Posted by user_id

The dollar menu prices are not the cause of McDonalds low wages, McDonalds would provide low wages regardless. The wages are controlled by the supply/demand in the labor pool. There are a large number of unskilled workers out there as a result they are not able to command a high salary.

But regardless, McDonalds can offer to pay higher wages and provide a dollar menu. It would come at the expense of their share holders and upper management. Although, they don't have a dollar menu per se In and Out burger in on the west coast is bit a cheaper than McDonalds yet they starting pay for their workers is a good $2~$3 higher than McDonalds. But its a private company.

Plenty of truth to this. In the DC area, before masses of illegals showed up, they had to raise wages to get people to work fast foods. Once they had the "scrap heap of labor" at their door, wages went down as illegals worked like dogs for crummy pay and they advertise their dollar menu as if its some sort of great breakthrough. In N Out Burger is a superb chain with GREAT food and employee treatment.