How Do the Fast Food Franchises Do It?

…Make their meals so cheap.
Well, this is where franchising shows its “difficult” side.
Depending on the Franchise Agreement, the franchisor may be able to dictate the retail selling price of their products.
Even worse than that, they often require that the franchisor purchases all the raw products, disposables and printed material directly from the franchisor at a premium cost.
Burger King is going through a difficult franchisor – franchisee relationship right now as the head office insists on all their franchisees joining-in their $1.00 cheese burger promotion.
The franchisees say that a cheeseburger costs them at least $1.10 to produce and that the promotion will cause them serious financial stress.
The franchisees have filed a lawsuit against Burger King and it will be interesting to see where this leads…