A McDONALD’S franchisee is suing the fast food giant for $7 million, claiming it withdrew support for his business because he raised prices for products such as McValue meals above the company’s recommended price threshold.
Ross Halliday has been a McDonald’s franchisee in Adelaide for 28 years, but has sold his restaurant after he was told his franchise would not be renewed.
He alleges the company engaged in misleading or deceptive conduct in breach of Section 52 of the Trade Practices Act prior to the decision.
The case, which is yet to be heard in the courts, gives a fascinating insight into how the nation’s biggest fast food chain oversees its 730 restaurants.
Mr Halliday said he had successfully run several McDonald’s outlets, taking on one of Adelaide’s first stores at West Lakes in 1980, when it had a reputation as the lowest-volume store in the nation. After 22 years, revenue increased from $400,000 to $2.8 million a year in 2002. He also bought a restaurant in the Adelaide suburb of Croydon in 1987 when it was turning over $700,000. Today it has revenue of $3.7 million, but was recently sold after McDonald’s decision.
Mr Halliday traces his difficulties to April 2004 when he was told the contract to run the Croydon store was in jeopardy because of his decision to unilaterally raise prices by an average of 3 per cent above recommended levels.
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