Statement no. 1 — Collorafi

Fax received from : 01.35.27 67,13 85/83/99_ 89:22 .Py: 1 CLEMENT LAW FIRM 78 Avenue Mozart / 75016 Paris (métro Jasmin / tel.: 01 45 28 63 02 / fax: 01 45 25 67 13 Jean-Paul CLEMENT STATEMENT (*DIRE*) Messrs Jean-LuC DUMONI and Alain MARTIN, Experts Lawyer at the Court Former member of the Council of the Bar and of the National Council of Bars The Undersigned has the honour to present the following observations in the form of a statement before Anne-Marie DUPUCH VALLUET to be annexed to the report to be filed by the Lawyer at the Court experts. PRELIMINARY REMARKS The Court put ten questions to the Experts and the position of Mr Bernard COLLORAFI and of the companies SEBOL, B and O and LES PINS, will be set out question by question. However, first of all, while referring to the file lodged with the Experts at the meeting of 2 February 1999, the signatory has the honour, on behalf of Mr Bernard COLLORAFI and of the companies SEBOL, B and 0 and LES PINS, to make the following preliminary remarks. a) ON THE MANAGEMENT OF MR BERNARD COLLORAFI All of the documents communicated show - that Mr Bernard COLLORAFI, through the company SEBOL, steadily increased the turnover, bringing it from 1987 to 1993 to 27,973,000 francs - that despite the opening of a QUICK, he was able to maintain in 1995 the turnover at 24,750,000 francs - that the turnover statements month by month (and even week by week) show that it was at the beginning of October 1996, just after the opening of ANTIBES NORD (by the company B & O) that the turnover of the company SEBOL fell to 18,300,000 francs for 1996) and 11,500,000 francs in 1997 (Document No. 139) The first five months of the year 1998 confirm this spectacular fall (4,300,550 francs for five months) (Document 140) - that at no time until the termination of the agreement by the company MC DONALD'S on 2 January 1998 did the latter make any reproach to Mr COLLORAFI about his management, the adversary being able to produce only a single critical report in eleven years ! - that on the contrary, he was congratulated on numerous occasions, received prizes, was asked to train candidates in his restaurant, rated PALAIS : J.P. GLEMENT : B 405 - Anne-Marie DUPUCH VALLUET : C 1253 Members of an approved association • payment of fees by cheque is accepted Pg: 2 18015 placan 5, 1ó, 14, 29, 28, 29 58, 58, =6. 17, 78 and 83, cota 11) the company ME DONALD'S had no criticism to make throughout the year 1997, although there were nevertheless difficulties in the payment of the rents. It even wrote in its visit report of 19 November 1997: MC DONALD'S .. I encourage you to maintain Les mayant ore de couree la proces de pe aganisation doit 6ixe I encourage you to maintain, even to perfect, your standards current in the matter. it is essential to be able to manage the drinks over the peak periods GLO MB PAS reach honourable levels. At the FAC level, the results are close to the average, with a C À lower. » it may be noted that the company ME DONALD'S was to give notice and did give notice a few days later to the three companies to pay their fees and terminate the agreement one month after the formal notice. it may be added that the company MO DONALD'S played the role of adviser and of consequence to comply with the MC DONALD'S standards. it is responsible for the management imbalance of its restaurants which and there are numerous closely spaced openings in its catchment area ON THE CATASTROPHIC FALL IN TURNOVER The examination month by month of the turnover figures of the company SEBi shows an impact of - 25% on turnover due to the opening of QUICK in 1995. The situation was beginning to stabilise during the 3rd quarter of 1996 since the month of September 1996 saw a decrease of 16% and for the first week of October of 10.50% On the other hand, Socier de la de passe a pour te cotre d'AMIBES NORD, • from 35.5% in the month of October 1996 40.12% in November 1996 - from 39% in December - from 40.16% in January 1997 - from 39% in February 1997 - from 45% in March 1997 - of 38.28% in April 1997. (Document 139); 18:35 DE A 0493459915 P.04 catastrophic, obviously, this fall coincides exactly with the opening of NORD by B & O on 9 October 1996. From the opening of the ANTIBES OUEST restaurant (29 April 1997), the fall worsens since, - for May 1997, the fall is 15.09% - for June 1997 38.59% - for July 1997 41% - for August 1997 41.17% - for September 1997 42.% - for the last quarter of 1997 the fall decreases ... so great had it been in the preceding months ! The examination of the accounts of the company E l l shows that: Pose 29 on de ont d99hutde demier pro e ce du soi et turnover (document 141) - for November 1997, 18.3% it is only from December 1997 that the figure stabilises at - 7.26% to decrease again in the first quarter of 1998 and even increase from May 1998 at + 4.5% that is to say that the fall in turnover is unquestionably linked to the impact of the successive openings of MC DONALD'S restaurants It is appropriate to recall the very cunning system devised by the company MC DONALD'S - It is very generally the owner of the land - it is most of the time the owner of the building which has only increased in value - it is the owner of part of the fittings - it is the owner of the business • cas gachiro : si ale thanas par po euro et no part a en chan t lam all of the equipment which diminishes and depreciates as amortisation proceeds and therefore is worth nothing after a few years - the lessee-manager, at the expiry of the agreement, after twenty years, has capitalised nothing - the spirit and the letter of the agreement lead to considering that the profitability and the profit of the franchisee lessee-manager must be found each year for twenty years (or at least during the last sixteen or seventeen years). That is what Mr COLLORAFI had begun to obtain from 1992, since he received 400,000 francs by way of dividends DE A 0493459915 P.05 - for 1993 when he received 900,000 francs of dividends - for 1994 when he received 1,850,000 francs of dividends - for 1995 when he received 1,000,000 francs of dividends (which he reinvested) - in 1996 he will not be able to receive dividends, since there is no longer any cash, given the losses which are going to accumulate (the profits of 1996, that is 320,000 francs, are therefore not distributed). Thus, the profit of five years (about 5,500,000 francs) will correspond approximately to the losses which are going to be generated by the three companies, between 9 October 1996 and 9 June 1998. d) ON THE PRE-CONTRACTUAL FINANCIAL DOCUMENTS it should be stressed that the Company MC DONALD'S determines the fee according to the foreseeable turnover construction (rebate by applying of profitability, it adds to it a mark-up of 15% (intended to pay the management costs of these premises) Starting from there, it • the document determines of operation of business {raDobiné auacoptiblo da parmottia MORAIDUX COLLORAII a LavaotI presented, 000 FIanCA (OXzo 11111048) since Indorancas, chalandizo, mais an DONALD'B. stress the perversity of this method of calculation, always allows franchisor to fend for himself ERIcUlés nOR pas foratios de Ionct102 dea tavaatiunementa ão XO - For the company SEBOL, a document on MC DONALD'S letterhead, signed by the person in charge at MC DONALD'S entitled * STATEMENT OF PROFITS AND LOSSES », and this, dated 13 April 1987, states * a turnover of 17,500,000 francs in the first year * and of 19,000,000 francs in the third year a salary of the * concessionaire » of 360,000 francs in the first year of 480,000 francs in the third year * a net income for the period of - 433,750 francs for the first year and of + 1,233,810 francs from the third year. these latter results were to be achieved as indicated from the fifth year and only for three years (1993, 1994, 1995). 18:36 DE A 0493459915 P.06 As for the company B and O, the document called: * Hypotheses in thousands of francs * "provides for a turnover of: * 20,000,000 francs in the first year * 20,534,000 francs of average turnover during the first ten years • with a cash flow after financing of 452,000 francs for the first year * and of 891,000 francs for each of the ten following years (Document 26 cota 13b1a) As regards the ANTIBES OUEST restaurant opened by the company LES PINS. It was given a document also called « HYPOTHESES »: providing * a turnover of 13,000,000 francs in the first year - and of 14,230,000 francs on average for the ten following years * a cash flow after financing of 425,000 francs in the first year * and on average of 957,000 francs for each of the ten following years (document 12 cota 19) r the company SEBOL is 12 1,800,000 francs the second restaurant has a fee of 20% with an annual minimum of 2,940,000 francs excl. VAT while the third restaurant (Company LES PINS in ANTIBES OUEST) has a monthly fee of 15% with an annual minimum of 1,200,000 francs. The total annual minimum fee is therefore 5,980,000 francs excl. VAT. in its three companies, the company MC DONALD'S had banked 43,000,000 the minimum fee) and made a total profit of 148,000,000 francs (148 million) in 1997, increasing by 30% each year. It should be stressed that from July 1996, the impact of the opening of QUICK is less significant since the fall is no more than • - 17.36% for July 1996 12.84% for August 1996 - 16% for September 1996 Naturally, from the end of October, the impact leapt to 35.95% Fax received from : 01.95.27 63_13 85/83≤99.-_98122 ELEMENTS OF REPLY TO THE TEN QUESTIONS PUT BY THE COURT Fax received from: 81.45.23 6}, 13 85/03/99- 08:22.P8: 4 a) concerning the period prior to 1 July 1997 1st question IF MR COLLORAFI HAD REDUCED HIS SALARY IN 1995 AND 1996 BY HALF AND IF HE HAD LEFT IN CURRENT ACCOUNT ALL OR PART OF THE DIVIDENDS RECEIVED THOSE YEARS IN THE COMPANY SEBOL AND IF, IN THE COMPANY B AND O (THE COURT HAVING NO INFORMATION ON THE SALARIES POSSIBLY RECEIVED COMPANIES TO REACH THE ANNUAL BREAK-EVEN POINT, WHICH IS THE FIGURE It should be specified that, if Mr COLLORAFI did not lower his salary, he did not increase it either (with the exception of a very slight increase in 1997) Although managing three restaurants instead of one, he did not receive a salary from the company B and O nor from the company LES PINS. The agreements were signed between SEBOL and B and o on the one hand, and SEBOL and LES PINS on the other, then subsequently by the GIE SODEVA (Documents 130, 131) if Mr COLLORAFI had divided his salary by two, this would have given the following results for 1997: from the company SEBOL, he received, charges included, 385,712 francs from the company B and 0, he received charges included, (through re-invoicing) 459,870 francs Had he divided his salary by two, he would have received: - SEBOL, 192,856 francs - B and 0, 229,939 francs In terms of results, the position would have been as follows: • POLE SEBOL 971,112 francs (losses of 1997) 229,939 francs (salaries not invoiced, which would not have been invoiced to B & O 192,856 francs, share of the salary which would not have New result: - i 008 195 fxaros the company B and - 1,223,134 francs, losses of 1997 229,939 francs, share of the salary which would not have been invoiced by SEBOL New result 545 francs As regards the reply on the matter of the current account and the dividends, it is appropriate to specify what was stated orally. Dividends are voted by the general meeting, and transferred to the current account of Mr COLLORAFI. Thus, in July 1995, he received 1,850,000 francs of dividend (his first exceptional dividend) at a time when he had no inkling of what was going to happen. He had no reason to reinvest them, as he had done in the preceding years. In July 1995, when he did not have confirmation of the opening of the ANTIBES NORD restaurant and of its financial consequences, the amount of his 1995 dividends was transferred to his current account up to 1,000,000 From the month of August, he diverted 500,000 francs of it for the needs of the company B and 0 which he was creating (50,000 francs for the capital, 550,600 francs by way of current account) (see SEBOL and B and O balance sheet for 1996) There therefore remained to him at the end of the year 350,000 francs in current account. In February 1997, he took back 200,000 francs which he was going to invest in the company B and 0 and 50,000 francs for the capital of the company LES PINS. In total, he actually received in 1996, in respect of the year 1995, 150,000 in addition to his salaries. This is far from the assertions of the company MC DONALD'S complacently by the report of Mr Alain HUSSON DUMOUTIER, former court-appointed expert, conflating - the dividends actually received in 1995 at a time when there was no question of opening a second restaurant • and the dividends actually received in 1996 (in reality 150,000 francs, since the rest was immediately reinvested, which Mr HUSSON DUMOUTIER and the company MC DONALD'S took good care not to note) As regards the profits of 1996, that is 320,000 francs, they were not distributed for the good the losses are The profit of 320,000 francs would moreover have been much higher had it not been for the impact of the last quarter of 1996. Fax received from : 01.45.27 67_13 85/8319808:22 ; Pg: 6 It was in these circumstances that, being unable to invest at the beginning of 1997 in B and O the amount of his current account of 350,000 FRANCS, Mr COLLORAFI took out a loan of 350,000 francs at the very modest rate of 4.525% which enabled him to withdraw his current account and to invest it up to 200,000 francs in B and 0 and 50,000 francs in LES PINS. To reply to the Court, it should be stressed plethoric cash position - that the question could have arisen from the 4th quarter of 1996 and rather in 1997 and that, as has just been shown, this would have made it possible to reduce the losses by less than 200,000 francs (out of 2,200,000 francs), that is 10% It would therefore have changed nothing. - that Mr COLLORAFI quite naturally received his current accounts up to and including the 1995 financial year (settled in July 1996) which is legitimate, since he was thus beginning to reap the fruits of his hard work. Moreover, if he did not leave his dividends in current account in the company SEBOL, it was to invest them in the company B and 0, then, at a He actually received 150,000 francs of dividends for the year 1996, in respect of 1995 and nothing in 1997 in respect of the year 1996 (although still slightly profitable, at 320,000 francs). If one adds the two sums, (reduction of 200,000 francs of charges which he * should have achieved » on his salary, and dividends of francs which he should have reinvested). one arrives at 350,000 francs, that is 15% of the total loss of 2,000,000 francs. One was therefore very far from the mark. As regards the salary of Mrs Olga COLLORAFI, it should be stressed that she received over ten years a salary of 1,561,091 francs, that is 156,109 francs gross per year, that is 124,887 francs net per year, that is 10,416 francs per month. It was out of the question to lower the salary of an employee, even if she was the wife of the Chairman and Chief Executive Officer. Fax received from: 91 45_27 67, 13 05/83199-28:22 If she had not done the work, another employee would have had to be found. Her work consisted of: - care of the plants - supervision of the upkeep of the restaurants, in collaboration with the cleaning teams, the restaurants always having the rating EXCEPTIONAL or EXCELLENT - upkeep of uniforms - reception hostess during busy periods - birthdays Fax received from : 01.35.27 67_13 85/83/99-89:22 ..Eg: Question No. 2 STATE WHETHER THE RIDER TO THE AGREEMENT OF THE COMPANY B AND O REFERRED TO ABOVE WAS MADE IN TIME OR TOO LATE AND WAS SUFFICIENT IF MR COLLORAFI REDUCED HIS SALARY IN THE COMPANY B AND O, IF HE IN FACT RECEIVED ANY FROM THAT COMPANY Added to the loss recorded in 1996 (in the last quarter of 1996). that is 766,141 francs, a loss of 1,200,000 francs would still have remained. It is obvious that a larger reduction of the fee, both for the company B and O and for the company SEBOL, should have occurred, - that despite the reduction of the • monthly fees by 65,000 francs, the company B and O still records a loss of 1,220,484 francs to which the loss of 1996 must be added, that is 766,145 francs, that is to say a total of 1,994,625 francs - that thus, the reduction should have been at a larger level, and from 9 October 1996 and for several years. It appears that the very slight reduction for the year 1997 only the proportional fee from 20% to 17% and in absolute value from 245,000 francs to 180,000 francs (the enormity of which will have escaped neither the Court, nor the experts) was very largely late was very largely insufficient, both in its amount and in the duration of application. Fax received from : 81 45 27 6], 13 85/03199.-_03:22 ..Ps: 3rd question WHETHER THE OPENING OF THE "ANTIBES NORD" RESTAURANT MADE IT POSSIBLE TO TRANSFER PARTIALLY FIXED COSTS FROM THE COMPANY SEBOL TO THE COMPANY B AND O CONSIDERED AS AN ECONOMIC UNIT BECAUSE OF THE COMMON INTEREST OF THE PARTIES IN SEEING THEM OPERATE AS SUCH FOR THE PERIOD CONSIDERED if one excludes the figures for the year 1998 which are not very significant since they result from the extrapolation of the figures for the first five months, one notes from table 1 (next page) - a fall of this type of costs at the level of the company SEBOL which are brought down from 1.76 million francs in 1993 to 1.07 million francs in francs for ANTIBES OUEST the whole of the 3 restaurants, the administrative costs of administration therefore rise million francs in 2.5 million francs in 1997, that is an increase of 800,000 francs. 1993 to is perfectly : the increase in the number of restaurants necessarily entails an increase in administrative costs administrative, even if this increase is not proportional to the number of places of operation. In the multiplication of the number of restaurants improvement in the productivity of the administrative staff. it will be noted that the costs per place of operation amounted to 1.76 million in 1993 and are no more than 860,000 francs in 1997, that is a reduction of nearly 50%, which reflects a significant productivity effort. DE A 0493459915 P.14 4th question INVITED TO COMMON OF THE PARTIES IN SEEING THEM OPERATE PERIOD CONSIDERED companies SEBOL neuf main, it should be specified - that the cumulative turnover for 1996 was 24,754,000 francs SEBOL B and o:.. 18,300,000 francs 2,388,837 francs ----4==- 20,688,837 francs and the losses EBOL . 320,000 francs 766,141 francs that is... 426,141 francs - that the turnover for the 1st half of 1997 was pOuX 199€ SEBOL B and o::. 5,595,180 francs 7,969,902 francs (that is - 25% 5,951,386 francs and the losses assessed at SEBOL 971,112 francs 1,228,484 francs 2199 1es iranos = 1,100,000 francs (rounded) TOTAL PAGE(S) 14 DE A 0493459915 P.01 1a ériede postériouza tuillat 5th question WHETHER THE NEW RESTAURANT "ANTIBES OUEST" WAS VIABLE IN ITSELF OR WHETHER, AS THE COMPANY MC DONALD'S OPENED IT AT THE SAME TIME AS SHOWS THAT IT HAD VALSAIENT CE O RESTAURANTS, IN A WHOLE "ANTIBES OUEST" ETON RAREMENT À CE QUI "VALLAURIS" WHOSE FORECAST, ENTRUSTED THE LEASE-MANAGEMENT (*LOCATION-GÉRANCE*) SEEMS TO HAVE THE RESTAURANT ENTAMENT QUE LE COMPEN DE LA MOTIVE SURES ET It should be recalled that the company Mo DONALD'S, without the knowledge of its franchisees, buys the land, requests a part of the building permit, and begins to warn long franchisees who may be interested, only when construction starts. It should be stressed that the building permits were obtained on the following dates: ANTIBES NORD, VALLAURIS, ANTIBES OUEST, 12 February 1996 28 March 1996 13 August 1996 That is to say that, when in July 1996 the company MC DONALD'S warned Mr COLLORAFI of the opening in his primary catchment area, of a MC DONALD'S restaurant.. it had in view to open VALLAURIS for which it had obtained a building permit on 28 March and ANTIBES OUEST for which it was going to obtain the permit a few days later (13 August 1996), it being recalled that several months elapse between the application for a building permit and the obtaining of it. it is only in August-early September that the company August 1996). The study which comprises it and which nevertheless dates from February 1996, states: a MC DONALD'S restaurant near the site, in: (this is the restaurant managed by the company SEBOL) « another MC DONALD'S restaurant is planned on the avenue de Cannes, close to the seafront » Fax received from : 01.45.23 67_13 85/83/29 - 98:22 Pg: 12 it may be noted that, very skilfully, the town of VALLAURIS is part neither of the primary zone (called proximity zone) nor of the secondary zone (S2 S3, called total attraction zone) and stops at the gates of VALLAURIS, although it is appreciably at the same distance in time and in kilometres from the CARREFOUR shopping centre (See document 39, The three building permit applications (ANTIBES NORD, ANTIBES OUEST, and VALLAURIS) requested together and obtained almost at the same time, show • that the policy of MC DONALD'S went further than countering its competitor which had opened in July 1995 - that it was an overall strategy aimed at reducing the catchment area of the company SÉBOL, the company MC DONALD'S having envisaged at first setting up a joint venture with its Patrick GILLARSKI, wanted SÉBOL for his own benefit (if not exclusively, at least by half) The determination of Mr COLLORAFI to obtain the two restaurants obviously upset the plans of the company MC DONALD'S the latter was not consistent with itself, because it had to either allocate to Mr COLLORAFI the two new restaurants of ANTIBES OUEST and VALLAURIS - or refuse him both restaurants, which would have caused an even greater catastrophe. The intermediate solution found was indeed, as the Court noted, contrary to the economic analysis that had been made at the outset The 1997 balance sheets for the three companies managed by Mr COLLORAFI show - that the opening of the ANTIBES OUEST and VALLAURIS restaurants on 29 April 1997 aggravated the fall in the turnover of the company SÉBOL and entailed a fall in the turnover of the company B and 0 - that the company LES PINS did not reach (like the companies SÉGOL, and B and o moreover) the turnover figures provided for in the document entitled * HYPOTHESES * the submitting parties reserve the right to present their observations as soon as the company MC DONALD'S has produced its accounting documents concerning the three restaurants, as well as that of VALLAURIS. as the experts have asked it to. fax received from : B1 35 2? 67 13 85/03/93. 88:22 ..Pg: 13 5th question WHETHER, TAKING INTO ACCOUNT THE FINANCIAL SITUATION OF THE WHOLE "CARREFOUR" "ANTIBES NORD' AND OF THE FACT THAT MR COLLORAFI CLAIMED THAT HE COULD FINANCE THE "STRAIGHT LICENCE" AGREEMENT OF ANTIBES OUEST, THE COMPANY MC DONALD'S GAVE A "POISONED GIFT" TO MR COLLORAFI, AS THE LATTER SEEMS TO CLAIM, OR WHETHER ON THE CONTRARY IT WANTED TO GIVE HIM AN ADDITIONAL CHANCE TO GET OUT OF DIFFICULTY this question is linked to the preceding one, since it is a matter of determining whether the ANTIBES OUEST restaurant was viable in itself on the one hand, linked to the companies SÉBOL and B and O on the other hand linked to the VALLAURIS restaurant finally. The answer to this question can be found in the results of the four companies for the years 1997/1998. These results are to be compared with the hypotheses made by the company MC DONALD'S, - both for the ANTIBES OUEST restaurant and - for the VALLAURIS restaurant. The cumulative losses of the 3 restaurants are established as follows: 192€ SEBOL B and O LES PINS Total that is: - 4,860,539 350,000 (carry back 1997 SEBOL) ) TOTAL Fax received from : 01 45 27 67_13 85/83/92- 98:22 ..P9: 14 7th question CONSIDERING THAT THE EXPERTS WILL HAVE TO GIVE THEIR OPINION ON THE OVERALL FINANCIAL COHESION OF MR COLLORAFI IN THE THREE COMPANIES UNTIL 1 JANUARY 1998 It is naturally for the experts to give their opinion on this question. October 1996, the company SEBOL entered into an agreement company B and o, under the terms of which the company SEBOL re-invoiced pro rata to turnover, - the administration costs - the persons employed over several units - the office expenses - the vehicle costs (documents 128 and 130) In April 1997, an identical services agreement was entered into between the company SEBOL and the company LES PINS. (Document 131) traval jant sur plusieurs un 6 au BornArd CORA 58 10808 working over several employee of the company SEBOL. (Document 132) The company SEBOL continued to re-invoice its administration costs pro rata to the company B and 0 and to the company LES PINS, while the GIE SODEVA re-invoiced to the three companies, again pro rata. 8th question CONSIDERING THAT THE EXPERTS WILL GIVE THEIR OPINION ON THE ACCOUNTS OF THE COMPANIES SÉBOL, B and O, AND LES PINS, BETWEEN 1 JANUARY 1998 AND 10 JUNE 1998, THE DATE OF THEIR EXPULSION it is likewise for the experts to give their opinion, as they have been asked to, but Mr COLLORAFI and the three companies wish to make the following observations Fax received from : 01.45.2? 67_13 85/03623c-98124 ,.19• 15 9th question IT BEING RECALLED THAT MR COLLORAFI HAD THE MANAGEMENT OF THREE RESTAURANTS AND THAT HE MAINTAINS IN HIS SUBMISSIONS, NOT WITHOUT RELEVANCE, THAT, IF HE ACHIEVED WITH THREE ESTABLISHMENTS A TOTAL TURNOVER EQUIVALENT TO THAT OF THE COMPANY SEBOL IN 1993 THE TOTALITY OF THREE FEES WAS INFINITELY HIGHER THAN THAT WHICH SEBOL HAD PAID IN 1993; THAT IN OTHER WORDS, THE EXPERTS WILL HAVE TO SAY WHETHER THE INCREASE IN THE CUMULATED FEES OF THE THREE RESTAURANTS • COULD BE OFFSET BY THE FALL IN THE ADMINISTRATION COSTS OF THESE During the same period, despite the temporary reduction granted by MC DONALD'S fee standard of ANTIBES fees paid the three restaurants went from 4.6 million to 6.9 million francs. Quite obviously, this the whole constituted offset by a administration of fallen but have perfectly logical. increase noted level three restaurants, fall costs administrative as a whole, which on the contrary increased and matter In a more general way, the surplus of margins on variable costs (before variable MC DONALD'S fees) generated by the increase in turnover of 4.1 million francs achieved between 1993 and 1997 which one may estimate at 1.5 million 138% of turnover) did not make it possible to offset, and of - the increase in fees (2.3 million francs) - the increase in all of the fixed costs (+ 3.3 million according to table which include only administrative costs increased francs) also the fixed costs linked to the place of operation (salary of managers, promotion equipment increased by electricity, upkeep and repair of the insurance, 2.5 million