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Contracts Keyed to Kuney
Burger King v. Family Dining, Inc.
Citation:
426 F. Supp. 485 (1977).Facts
On May 10, 1963, Family Dining entered into a 90-year Territorial Agreement with Burger King. Under the Agreement, Family Dining was to have the exclusive right to develop the Bucks and Montgomery Counties in Pennsylvania with Burger King franchised restaurants. Pursuant to the agreement, Family Dining was to open and operate one new restaurant per year for the first 10 years of the contract and continually maintain not less than 10 restaurants for the remaining 80 years of the contract. If Family Dining failed to meet this schedule the agreement was to terminate.
In 1967, Family Dining fell behind schedule and Burger King agreed to waive the development rate pursuant to a Modification Agreement entered on May 1, 1968. By mid-1968, the fourth and fifth restaurants were opened. In 1969, Family Dining encountered delays with site approval and was granted a one-month extension by Burger King. The sixth restaurant was opened on October 1, 1969. By 1970, Burger King was a wholly-owned subsidiary of Pillsbury Company and in August 1970, the company’s National Development Committee rejected Family Dining’s choice of location for the seventh restaurant. However, the eighth restaurant was opened ahead of schedule on October 7, 1970 and in December 1971, the Committee approved two more Family Dining sites.
In early 1972, Family Dining again fell behind on development and by 1973 neither the ninth or tenth restaurant were opened or under construction. On May 23, 1973, Burger King sent a letter to Family Dining advising that it was in default of its Territorial Agreement and after a number of back-and-forth communications Burger King finally advised Family Dining the contract was terminated.
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