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Wendy's Franchisee Sues Over Ad Money Diversion

The largest franchisee of Wendy's has filed suit against the burger chain, claiming that it inflated the cost of soda syrup and diverted the extra money garnered by its national ad campaigns. The suit, filed in U.S. District Court by Maryland-based DavCo Restaurants Inc., charges that Wendy's diverted the extra money without crediting it back.

DavCo says that violates an agreement under which it contributes 3 of gross sales to the advertising fund. It also says that Wendy's is improperly keeping it from buying soda from the PepsiCo, saying that a "lucrative funding arrangement" with Coca-Cola is designed "to conceal the true market cost of fountain beverage syrup."

Read the whole story at Associated Press via MSN Finance »

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