Notes and addition cases for Burger King legal issues
Burger King Corp. v. Mason
Mason deals with franchise relations
Implied Covenant of Good Faith and Fair Dealing
Scheck v. Burger King Corp.
In 1985, Host Marriott converted the Howard Johnson's restaurant at the service area on the Massachusetts Turnpike (I-90) in Lee, Massachusetts to a Burger King. This location was just 2 mi (3.2 km) from another Burger King location also in Lee just off exit 2, owned by Steven Scheck. Scheck, who had recently spent over $1 million (USD) renovating to his store, claimed that the new location was causing losses to his franchise upwards of $300,000 annually by the end of 1987. With mounting losses, Scheck filed a federal lawsuit in 1989 against Burger King claiming that the Mass Pike location had violated the franchise contract's non-compete clause and that the company had breached an implied covenant of good faith and fair dealing.
Although Scheck's contract with BK did not grant him territorial exclusivity, the U.S. district court in 1991 issued a landmark preliminary ruling that the franchisor's express denial of an exclusive trading area "does not necessarily imply a wholly different right to Burger King -- the right to open other proximate franchises at will regardless of their effect on the plaintiff's operations."
Burger King Corp. v. Weaver
In 1976, C.R. Weaver entered into a franchise agreement to open a Burger King restaurant in Great Falls, Montana, with a second in 1988. The two franchise agreements differed in geographic scope, with the 1976 contract granting territorial rights to a defined area within the city and the 1988 agreement granting no geographic exclusivity. Burger King later authorized the AAFES to open a location on Malmstrom Air Force Base in October 1989, approximately 2 mi (3.2 km) from the two Weaver locations. Claiming the Malmstrom Burger King's encroachment violated both franchise agreements, Weaver stopped making his rent, royalty, and advertising payments in November 1989.
Barnes v. Burger King Corp.
- (932 F. Supp. 1420, 1437-40) (S.D. Fla. 1996)
- Likelihood of Confusion in Trademark Law By Richard L. Kirkpatrick, Practising Law Institute on Google book search
- Franchising By Ronald K. Gardner, Harold Brown, J. Michael Dady, Jeffery S. Haff on Google book search
- Scheck I & Scheck II
- The Sounds Of Silence In The Franchise Agreement
- covenants not to compete By Kurt H. Decker
- Mathay Inc.: BK franchisee finally seeing light at the end of a long legal struggle
- The Economics of Franchising By Roger D. Blair, Francine Lafontaine
- Tips For The Franchisee In Pursuit Of The American Dream
- Franchisee gains ground in BK 'cannibalization' suit
- Burger King Faces Franchise Fight
- Burger King May Win Points With Disgruntled Franchisees
- See also Fundamentals of Franchising and Franchising above.
Zarco law Article on the whole mess
- Scheck v. Burger King, 756 F. Supp 543 (11th Cir. 1991).
- Lisa Holton (Jan 1998). "Mathay Inc.: BK franchisee finally seeing light at the end of a long legal struggle". Nations Restaurant News. Retrieved 2008-08-03.
The lawsuit had challenged the 1985 conversion of a Howard Johnson's restaurant into a Burger King by Marriott Corp. near Scheck's Lee, Mass., BK branch on the Massachusetts Turnpike. Scheck's attorneys argued that Burger King had violated its own franchise non-compete rules and had made an "implied covenant"...
- "BK pays $4 million to settle landmark franchisee lawsuit". Nation's Restaurant News. Bnet. 1995-07-31. Retrieved 2008-09-19.
- Burger King v. Weaver, 169 F.3d 1310 (11th Cir. 1999).
- Cases citing Mason
- Cases citing Weaver
- Cases citing Scheck