Drums of complaint for McDonald's. The world's most famous fast food chain is facing a legal battle in Spain with uncertain consequences for its business model. At least twenty franchisees will file a complaint against the multinational's Spanish subsidiary for fraud, falsification of commercial documents and coercion. They will also file a complaint against the international parent company, McDonald's Corporation, and against its directors in Spain and the United States. “The complaint will definitely be filed, it is not a feasibility study,” say sources familiar with the case. Those affected, who have run up to 50 restaurants and estimate the damage to be millionaires, are not ruling out escalating the matter to the regional court.
The core of the conflict lies in two points. On the one hand, and always according to the managers' version, the Big Mac house supports a network of false intermediaries and phantom contracts aimed at generating cost overruns and double invoices. They accuse the hotel chain of charging twice as much for the distribution of hamburgers, soft drinks and other goods through an intermediary, the company Havi Logistics. These are referred to as “logistics costs”. For this concept, the managers would pay McDonald's with membership fees on the one hand and Havi with supplier invoices on the other. But franchisees assure that the service is the same.
Second, plaintiffs acknowledge that they were forced to become part of a franchisee association called “COOP.” The aim of this association is to promote the marketing and advertising activities of the house itself. To become a member you have to pay 4% of the house's profits. Joining the COOP is voluntary; However, the managers of these stores say they have suffered retaliation from the parent company for refusing to participate.
Background for the company
McDonald's defends itself. “We maintain an excellent relationship with the 122 franchisees who manage 92% of our over 600 restaurants in Spain,” emphasize brand spokespersons. It's the first time the king of fast food has spoken about his relationship with Havi and the COOP. The multinational group emphasizes that so far no judge has ruled in favor of a franchisee in all proceedings initiated in this matter. All lawsuits were either filed or resulted in judgments in favor of the chain. “There is currently no litigation with any franchisee of the McDonald's system,” they emphasize.
The truth is that the disputes over the relationship between McDonald's, Havi and the COOP have been going on for a long time. The debate over the duplicity of logistics and marketing costs has led to several legal battles in the last decade, with allegations crossed in court.
At the moment, the judicial balance has always tipped in favor of McDonald's. In 2015, a group of franchisees criminally sued Havi, but the matter was shelved in the Supreme Court two years later. Only a judge in Castellón in 2021 partially agreed with a former franchisee and ordered the world's most powerful hamburger chain to pay 3.7 million euros for covering double costs.
However, the joy didn't last long. In October 2023, the Castellón Provincial Court corrected this criterion. In their powerful ruling, the judges made it clear: “There is no corporate relationship between Restaurantes McDonald's SA and Havi Logistics.” This judicial position of the provincial court refutes the version of the former managers, who focus their accusation on denouncing that Havi and McDonald's are in fact the same. The judges also disputed that joining the COOP was mandatory and that there was no way to pressure local managers who chose to stay out of the system. Those affected have already announced that they will appeal this ruling to the Supreme Court.
Although the court record is not encouraging, José Luis González-Montes, lawyer at the Cremades Calvo-Sotelo law firm, is optimistic. His firm, which has represented other McDonald's franchisees, will lead the new fraud lawsuit being prepared by these twenty dissatisfied managers. And he assures us that the war is far from lost.
“We can prove that McDonald's is actually behind Havi and COOP,” asserts the lawyer in an interview with this medium. Montes assures that he has reports and numerous new documents to prove this. These come from the lawsuits he has filed against the multinational franchisor in recent years.
The fight is over. His office is currently pursuing three double-payment lawsuits against McDonald's and is awaiting the judge's decision. “One of my clients,” says the lawyer, “was forced to pay 17% of its sales to the parent company, plus 5% royalties to McD Corp, the international parent company, and also had to spend 4% on advertising and promotions” of the restaurant . To all this we must add what the lawyer defines as “hidden costs”, such as: B. Logistics, renovation work, changes to machines, advertising, sales promotion or sponsorship.
“McDonald's has ruined many of its franchisees,” Montes says. For its part, McDonald's is pinning its hopes on the verdict of the courts, both in civil and criminal proceedings. “We trust in justice and hope for a timely resolution of all cases in which legal remedies are still possible.”
Evidence efforts
Is there any chance that the McDonald's franchisees' lawsuit will succeed? History shows that the natural target of these types of lawsuits is the archive. Other chains such as Carrefour, DIA and Granier have been held accountable by some of their franchisees through criminal proceedings; However, none of these complaints resulted in a conviction. Judges need an enormous amount of evidence to conclude that a real network exists to defraud managers. A verdict that would have far-reaching consequences: prison for those responsible and a flood of compensation.
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