Burger King franchisees are suing their franchisor over being forced to price the double cheeseburger at maximum of $1. Franchisees’ problem is that it costs more than $1 to make and sell. I’m sure Burger King corporate response to the loss argument is that the total average sale involving the $1 double cheeseburger turns a profit, because on average people also buy at least a drink and fries.
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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-212-3423.
BK dollar burgers are a great deal. I am surprised BK can’t figure out how to make a double cheeseburger for less than a dollar. Maybe remove a slice a cheese like McD did with the McDouble? I would bet a buzz cut that the average transaction with a double cheeseburger makes money for the franchisee, because on average there is an order of fries, other sandwiches and drinks with a much better food cost. And there is a the possibility that can’t be measured that the transaction would have never happened if not for the dollar menu. That said, the average food costs are probably increasing for the franchisees.