Court Orders McDonald’s To Pay Salvadoran Company

December 16, 2005

SAN SALVADOR (EFE) – The fast food chain McDonald’s announced last week that it will appeal in El Salvador’s Supreme Court a ruling ordering them to pay local company Servipronto almost $24 million in damages.

 

On Dec. 7, a Supreme Court panel ordered the multinational to pay the Salvadoran company $23.9 million and give back the franchise it “unilaterally” withdrew in 1996.

 

That year, McDonald’s canceled the franchise it had awarded Servipronto, owned by Salvadoran Roberto Bukele, on the grounds it was not meeting the company’s standards of quality.

 

Servipronto may continue to use the brand name until 2016, the ruling said. In a communiqué released by McDonald’s on Dec. 9, the company called the court’s ruling “not consistent” with the facts of the case, and said it would appeal.

 

McDonald’s representative Roberto Romero said, “It is unfortunate that less than a month before the Central American Free-Trade Agreement with the United States (CAFTA) goes into effect, an inconsistent ruling comes down that flagrantly violates McDonald’s copyright.”

 

Romero added: “We are concerned that U.S. businesses with an eye on El Salvador get this type of message, which contravenes the rule of law, prompting legal uncertainty.”

 

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