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Burger King sued over unpaid franchise fees

Burger King sued over unpaid franchise fees

February 27th, 2013 in News

Jefferson City's Burger King is facing a franchise lawsuit.

Jefferson City's Burger King is one of seven in Missouri that hasn't paid its franchise fees and should cease operating, a lawsuit filed by the Burger King Corporation (BKC) alleges.

The federal lawsuit claims the Jefferson City Burger King and a half-dozen others in Missouri (three in Columbia, two in O'Fallon and one in Moberly) have violated their franchise contracts by failing to make required payments.

Their franchise agreements have automatically terminated as of Jan. 25, the suit says. It says the defendants were notified about past-due payments in a letter dated Oct. 24, 2012.

The lawsuit names Joseph R. and Vicki Gunther as the primary defendants. The Gunthers, believed to live in the St. Louis area, could not be reached for comment. No response had been filed to the lawsuit as of Tuesday.

As terminated franchises, the restaurants are "prohibited from identifying themselves as either a current or former Burger King franchisee, from using any of BKC's trade secrets, promotional materials, the BKC Marks, or any mark confusingly similar," the suit says.

It said BKC no longer sponsors or endorses the restaurants.

The Jefferson City Burger King was open Tuesday. A national spokesman said BKC does not comment on pending litigation, but that it is unlikely the restaurants will close.

A local Burger King manager declined to comment, and a BKC attorney didn't return an e-mail.

"BKC's goodwill and reputation will suffer drastically by virtue of the public's identification of BKC with the management and operation of the restaurants," the suit says. "The carefully nurtured image which BKC now enjoys will be irretrievably injured by any association with the restaurants ... ."

It says the franchisee is required to pay a certain percentage of gross sales for use of the Burger King name, and another percentage for advertising, sales promotion and public relations.

The suit is asking for unspecified punitive damages, compensatory damages and attorneys fees. It was filed in U.S. District Court for the Southern District of Florida.