U.S. Hired Gun Joins Macca's Bunfight

The Age, Australia, Saturday, March 6, 1999

 With his chunky gold bracelet, theatrical gestures and forceful voice, the US lawyer, Robert Zarco, looks as if he has stepped straight out of a TV courtroom drama.

The franchise expert, who has made a career out of litigating against fast-food chains around the world, strode into Melbourne yesterday as an advisor in a legal bunfight against McDonald's.

His client, Mr. Rod Hackett, operates two McDonald's stores, in Fountain Gate and Endeavour Hills, and is suing McDonald's Australia for undermining his business.

"Mr. Hackett is Mr. McDonald's. He believes in the McDonald's system but he has been wronged," Mr. Zarco drawled. McDonald's has shown a greater commitment to corporate growth than to the individual franchisee operators by opening new stores at the expense of those already established, he said.

In 1966, Mr. Hackett took out a writ against McDonald's after it proposed to open two outlets within four kilometers of his Fountain Gate restaurant.

Only the Berwick store proceeded, and Mr. Hackett alleged it caused his sales to slump 10 percent.

"It's cannibalism at its best: one franchise is eating up the sales of another," Mr. Zarco said.

McDonald's spokesman, Mr. John Blyth, said the case was without merit and that Mr. Hackett's restaurants experienced higher sales in 1998 than in the year before the Berwick restaurant's opening.

Mr. Hackett said McDonald's plan to open new stores closely followed his submission to a Federal Government inquiry into franchise operations. He said he was labeled a "non-positive contributor" by McDonald's and denied the opportunity to open further restaurants.

Mr. Zarco said that, like other franchisers around the world, McDonald's was 'overly aggressive and without concern for the future of their franchisees'.

"Their growth is based on what's good for them at the expense of their franchisees."

Mediation collapsed on Thursday and the case is set to go before the Supreme Court in July.