In December a Salvadoran court entered a judgment awarding Roberto Bukele, a McDonald's franchisee in El Salvador, $24 million in damages from the company with the golden arches. The court found that McDonald's had wrongfully tried to terminate Bukele's contract. McDonald's has announced it will appeal.
The Miami Herald has an article describing McDonald's decade long dispute with its first franchisee in El Salvador:
Operating in El Salvador has never been the golden opportunity Bukele hoped for when in 1972, the University of Wisconsin graduate got the license to open the first McDonald's in Latin America.
When civil war erupted at the end of the decade, Bukele's three restaurants in San Salvador made popular targets. One McDonald's was bombed in 1978; the next year, another was torched, killing two guards.
Two years after the war ended in 1992, McDonald's signed a new agreement with Bukele, renewing his licenses until 2014 and offering a $1 million loan to modernize the restaurants....
The 64-year-old who got a license to open the first McDonald's in Latin America has been fighting a legal battle with the fast-food chain that seems to never end.
McDonald's sued Bukele and his company, Servipronto, in 1996 to cancel their contract, claiming his food quality didn't meet the chain's standards. Five trials and appeals over nine years later, an appellate court in December ruled McDonald's must pay Bukele $24 million in damages. ''Someone told me I was never going to beat McDonald's. And here we are,'' Bukele said.
But the fight's not over yet: McDonald's has asked the country's Supreme Court to overturn the award.
I tried to decide if there are any deep insights to be drawn from this tale. Some will view it as a sign that El Salvador's legal system is not ready to protect the rights of foreign investors. Others will view it as a story of a successful fight against a rapacious multinational corporation. Some will view it as yet another example of globalization and wonder whether any one should care whether there are any McDonald's restaurants in El Salvador. I am not sure there is any moral, but it is clear that this highly publicized dispute has not prevented other US restaurant chains like Burger King, Domino's Pizza, Kentucky Fried Chicken, Pizza Hut and Tony Roma's Ribs from establishing operations in the country.