Burger King Franchisees Drop McDonald's Lawsuit

An association representing some 1,250 Burger King franchisees has dropped a class-action lawsuit it filed last month against McDonald's Corp for false advertising and unfair competition from McDonald's Monopoly games and other promotions from 1995 to 2001.

The National Franchisee Association and one Burger King franchisee withdrew the lawsuit on Aug. 26 just days after filing it. The NFA referred all calls to its lawyers. Attorney David C. Weiner of the Cleveland, Ohio-based Squire, Sanders & Dempsey law firm representing the NFA, refused to comment on why the suit was dropped.

The lawsuit, filed Aug. 18 in U.S. District Court in Atlanta alleged that McDonald's continued to run its popular promotional games even after learning they had been rigged in a scandal that ended in 2001 with McDonald's offering make-good games and agreeing to a $16 million settlement with Simon Marketing, Inc., which administered the Monopoly game.

In August 2001, the FBI arrested eight people involved in fixing McDonald's promotional games and stealing more than $20 million worth of game pieces. Jerome Jacobson, the scam's ringleader who worked as the security director for Simon Marketing, Inc.—the agency in charge of running the Monopoly promotion—pleaded guilty in 2002 and was sentenced to more than three years in prison. More than 50 people were charged in the case.

The lawsuit alleged McDonald's diverted business from Burger King franchisees and also earned windfall profits it would not otherwise have obtained.

The association represents more than 6,000 restaurants in the U.S. and Canada. Miami-based Burger King Corp. was not party to the lawsuit.