Collo vs McDo

Correspondence · 1 Aug 1997

Registered letter Collorafi → McDonald's

Correspondence exchanged between the parties (or their counsel) in the course of the dispute.

Type
Correspondence
Date
1 Aug 1997
Parties
From Bernard Collorafi

Summary

Summary sheet

Registered letter from Bernard Collorafi to Isabelle Kuster · 1 August 1997

Overview: registered letter with acknowledgement of receipt sent by Bernard Collorafi to Isabelle Kuster, of McDonald's France, with a copy to Denis Hennequin. It replies to a letter of 23 July 1997 and defends the franchisee's management in the face of the unpaid fees.

Key points

Mr Collorafi attributes the “catastrophic” situation of his restaurants to the openings decided by the chain since October 1996, which he says competed with his establishments. He details month-by-month falls in turnover, of the order of 36 to 45% compared with the previous year, and recalls the opening of the Antibes les Pins and Vallauris restaurants. He argues that it is not his management that is at fault, but rather these successive establishments, which caused the cash shortfalls. Pointing out that he pays a 5% service fee and has received no comments on his management, he recalls that the franchisor owes him operational and management advice in return. He concludes that his cash position does not allow him to pay the invoices, but undertakes to do so as soon as possible.

Significance

This correspondence formalises the franchisee's position in the conflict over unpaid fees and lays down his defence: the decline in activity would result from the franchisor's decisions, not from a management fault.

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COLLORAFI Bernard 21 B, chemin de l'Estelle 06 110 LE CANNET LE CANNET, 1 August 1997 registered letter AR MC DONALD'S FRANCE for the attention of Isabelle KUSTER Actimart 1140 rue Ampère BP 309 13798 AIX EN PROVENCE Dear Isabelle, I have duly received your letter of 23 July this month.. Allow me first of all to tell you that this letter is not lacking in cynicism and hypocrisy. Indeed you are perfectly aware of the catastrophic situation of these 2 restaurants since October 96, the date on which you imposed several openings of the Chain which competed with my restaurants, and I did not fail to point this out to you either orally or in writing and also in my writ of summons of 8 September 1997. Moreover you receive the operating accounts of the restaurants and you follow their results scrupulously. You therefore cannot be unaware of this situation. It is surprising that you should suddenly make yourselves known today. I remind you of the falls in turnover due to these openings: SEBOL S.A. Beto compared with N-1 compared with April 97 and proportionally to seasonality. OCT 96 : -36% NOV 96 : -40% DEC 96 : -39% JAN 97: 40% FEB 97 : -39% MAR 97 : -45% APR 97 : -38% MAY 97 : 45% JUN 97: -39% JUL 97: 40% Opening Antibes les Pins and Vallauris -19% -09% -21% page 2 These few figures show that it is not my management that is in question and that only the openings of several restaurants caused the substantial falls in turnover, thereby leading to the cash shortages. In this respect I point out to you that to date I have received no comment on my management although I pay a 5% service fee on turnover, which means in return the advice of the FRANCHISOR both for operations and for management. It is one or the other: either, as I believe, I have not made any management error, or I have made one which you should have pointed out to me, and in that case apparently you have failed in your contractual obligations. The cash positions do not today allow these invoices to be paid. Of course, as soon as it is possible I will not fail to settle these outstanding items Yours sincerely, dear Isabelle, cc : Denis HENNEQUIN

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Other documents — Correspondence

Registered letter Collorafi → McDonald's16 Dec 1996Letter Collorafi → D. Raix16 Dec 1996Registered letter Collorafi10 Jan 1997Letter Collorafi → Aix17 Jan 1997Letter Collorafi → counsel27 Jan 1997Registered letter Collorafi → McDonald's31 Jan 1997

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