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Ronald McDonald on Trial

The Lawsuit Shaking America's Premier Fast-Food Chain

When McDonald's, perhaps seeing the potential of the French market, refused to deliver France, Dayan sued and won the Paris market and a lucrative 30-year license that requires Dayan to return a mere 1 per cent in revenues to the parent company. Some franchises now pay as much as 12 per cent. But unlike McDonald's other franchise owners, Dayan wasn't given access to McDonald's advice and support systems under the agreement. He was to develop the French market on his own. In effect, "He was the Ray Kroc of France," Fred Turner, president and chief executive officer of McDonald's, testified.

Although Dayan faced formidable problems in starting a string of McDonald's stores in France, the hamburger finally took off in Paris in 1976. Dayan's outlets became some of the busiest restaurants in the world, and his 14 stores netted annual sales revenues of more than 30 million. Until the French began to ditch escargot for Egg McMuffins, McDonald's home office in Oakbrook, Illinois had left Dayan virtually alone. But as profits increased, Dayan argues, so did the desire on the part of company executives to repossess his suddenly prosperous market. In 1977, McDonald's began to send inspectors to Paris. After several attempts to buy the operation went nowhere, McDonald's terminated Dayan's license, on the grounds that he failed to maintain QSC.

You, you're the one

That we've been lookin' for

You, you're the one

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We've got it cookin' for

Although Epton, Mullin, Segal, and Druth, LtD., the Chicago-based law firm representing substandard, no one contends that his restaurants are models of cleanliness. In fact, Dayan's lawyers hoped to base their case on what they felt was selective enforcement of QSC standards by McDonald's. The crux of this argument was not that Dayan's operations were acceptable, but that they were no worse than many other McDonald's throughout the world.

To prove this contention, researchers at Epton, Mullin, Segal, and Druth attempted to document every rat, roach, and mouse ever seen in a New York City, Chicago, or Washington D.C. McDonald's between 1977 and the present. As Dayan's attorney's have noted, that adds up to a lot of health and safety violations. But that strategy failed when Judge Curry ruled that violations by outlets outside of France were irrelevant to the case--thus forbidding Dayan's attorneys from entering four boxes of illegible city health reports into evidence.

Curry, however, did allow Gerald B. Mullin, Dayan's senior attorney, to introduce as evidence letters among top McDonald's executives referring to Dayan as a "son of a bitch" who should be removed "at all costs" from "the McDonald's system." Mullin used that correspondence to allege that McDonald's is trying to screw Dayan out of a hamburger empire which could include 166 McDonald's worth billions of dollars.

You're why we're always near

Close by right on your way

You're why we keep our prices low

'Cuz you deserve a break today

So far, Judge Curry seems to agree. In a terse ruling issued in response to McDonald's motion--that the Court drop Dayan's case for lack of evidence, Curry sided strongly with the French entrepreneur. "Given the high level intrigue and high level entry within this major corporation that the Dayan suit provoked, I am satisfied that a prima facie case has been made. With the sanction of termination so extreme and heavy, the court should not deny the fullest range of testimony."

Dayan v. McDonald's, then, will continue to be tried in Curry's court for at least several months. With appeals from one side or the other almost certain, the case could drag on for several years if the lawyers don't settle out of court. One attorney expressing exasperation over what she considers to be a glorified debate over greasy french fries says she hopes the case ends differently: Wouldn't it be great to see Ronald McDonald stand up in the back of the courtroom and yell, "I confess! I did it!"

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