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Burger Chain Operator Accused of Misleading Franchisees

  • The FTC sued fast-food restaurant chain Burgerim, an affiliated entity, and their owner (collectively, “Burgerim”) over allegations that Burgerim used false and misleading promises to sell franchises in violation of the FTC Act and the Franchise Rule.
  • The complaint alleges that Burgerim marketed its franchises by pitching an opportunity for owning a business that required little experience while not disclosing material information about the risks associated with opening and running a restaurant. Burgerim also allegedly promised to refund franchise fees, which ranged between $50,000 and $70,000, if a franchisee were unable to open a restaurant, but, in reality, it often failed to refund franchise fees even after franchisees made multiple requests for such refunds.
  • The complaint seeks injunctive and monetary relief, and civil money penalties.