According to a report in the Wall Street Journal, the German division of hamburger giant McDonald's is being accused by several franchise holders of sharp practices designed to force them out of their contracts.

The report says court records show that in one case McDonald's hired private detectives to seek evidence of conflicts of interest against one of the franchisees, who operates four restaurants and was accused of putting money into a competing restaurant, against the franchise conditions. The franchisee denies the charge.

In addition five further franchisees accuse McDonald's of offering positions to employees in exchange for information which could have been used to terminate their contracts.

The people involved claim that these questionable tactics are aimed at reclaiming the outlets.

The senior director of McDonald's German legal department, Ulrich Bissinger, confirmed that the company had hired detectives to investigate one franchise holder.

The person involved, who manages four McDonald's restaurants, says he will have to give up his franchise because he can't afford the continued legal charges, amounting to around 4 million euros, needed to fight the case.

McDonald's Germany's actions are not illegal although uncommon in the restaurant industry.

The case is the latest in a series of incidents involving corporate spying in Germany. Companies like Deutsche Bank, the railroad operator Deutsche Bahn and the telecom provider Deutsche Telekom have all acknowledged that they spied on employees and others in recent years.

Author: Tony Dunham
Editor: Michael Lawton