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.

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