One of Wendy’s biggest franchisees won’t follow remodeling program, gets sued

Wendy's Co. and one of its biggest and oldest franchisees may be headed for a split.

The Dublin-based restaurant chain is suing Crofton, Maryland-based DavCo Acquisition Holdings LLC and DavCo Restaurants LLC, saying the franchisee refuses to remodel its restaurants and invest in a company-wide point-of-sale system.

"DavCo, a long-time franchisee of Wendy's, apparently believes that the guidelines announced by Wendy's, to be followed by all U.S. and Canadian franchisees, simply do not apply to it," the suit states. "As a result, DavCo stands virtually alone among Wendy's franchisees in combating and indeed repudiating two key obligations at the core of the franchisor/franchisee relationship."

DavCo, a franchisee since 1976, owns 152 Wendy's in Maryland, Virginia and Washington D.C. It is the company's fourth largest franchisee.

The suit was filed Dec. 22 in Franklin County Common Pleas Court.

"We work to resolve franchisee questions or concerns through a variety of forums," the company said to me in an email Wednesday. "After attempting to resolve these differences, we felt we had no other choice than to seek legal relief to terminate DavCo's franchise agreements."
DavCo has not returned calls for comment.

Wendy's (NASDAQ:WEN) says DavCo is balking at two company-mandated requirements – remodeling restaurants and installing a common POS system that will allow mobile ordering and payment and system-wide marketing initiatives.

Read the Full Article

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Reassessing McDonald's tech deals from 2019

The Bottom Line: The fast-food giant’s decision to end its drive-thru AI test with IBM is the latest pullback away from a pair of technology acquisitions it made five years ago.


Trend or fad? These restaurant currents could go either way

Reality Check: A number of ripples were evident in the business during the first half of the year. The question is, do they have staying power?


Starbucks' value offer is a bad idea

The Bottom Line: It’s not entirely clear that price is the reason Starbucks is losing traffic. If it isn’t, the company’s new value offer could backfire.


More from our partners