Suit Claims Wendy’s Inflated Syrup Costs

Money Cnn:

Wendy’s International largest franchisee is suing the hamburger chain for $2 million, claiming it improperly inflated the cost of soda syrup and diverted the extra money to national advertising.

The lawsuit, filed Tuesday in U.S. District Court by Maryland-based DavCo Restaurants Inc., says Wendy’s violated its contract with DavCo by diverting the extra money and not crediting it back to DavCo.

This violated an agreement under which DavCo contributes 3 percent of gross sales to the advertising fund, the lawsuit said. DavCo alleges Wendy’s actions caused the franchisee to pay more into the advertising fund than required dating back to 1998.

‘This lawsuit is totally without merit and we intend to vigorously defend our company on behalf of the entire Wendy’s system,’ Wendy’s spokesman Denny Lynch said.

DavCo operates 159 Wendy’s restaurants in Maryland, the District of Columbia and northern Virginia.

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