Jack Cowin, owner of Hungry Jack’s, was been awarded damages of around A$65m (US$33.6m) yesterday by the New South Wales Court of Appeal, which ruled that multinational fastfood giant Burger King had broken its franchise agreement with the Australian company.
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The ruling is the final chapter in a long running dispute between the two companies that erupted during the 1990s. Cowin has held the agreement for the local BK franchise for around 30 years, but when BK began opening its own outlets in Australia in 1997, Cowin took the giant to court claiming that their deal had been broken. In November 1999 the courts agreed and awarded Cowin damages of A$70m, but Burger King appealed.
Yesterday’s verdict dismissed that appeal and basically reiterated the judgement given by Justice James Moreton Rolfe nearly two years ago. The two volume ruling dismissed BK’s main grounds for appeal, the termination of a 1990 development deal between the two companies, as invalid. Cowin was awarded A$38.4m to compensate for time delays in the opening of BK outlets since relations between the companies deteriorated; A$24m for the loss of third-party franchisees and A$1.5m for the loss of service royalties. Interest rates of 10% will also apply from the date of the first court judgement in 1999.
