Day 138 - 20 Jun 95 - Page 35


     
     1
     2   Q.   Did he go?
     3        A.  No, he refused.
     4
     5   Q.   So what happened to his licence?
     6        A.  What happened was, if I could back up a little bit?  At
     7        the time that I went to Puerto Rico, the franchise
     8        agreement had been defaulted by McDonald's Corporation a
     9        good year and a half, two years, before I got there.  It
    10        was in the middle of litigation, default litigation.  The
    11        reason for that was the standards, the quality.  You have
    12        probably heard it many times -- quality, service and
    13        cleanliness standards, the things that are required under
    14        the licence agreement were not up to par.  The stores were
    15        not being operated the way we would want them to operate,
    16        so I would say a good year and half, two years before
    17        I arrived, we had instituted what is known as default
    18        proceedings.
    19
    20        These are some things that take a long time through a court
    21        process to resolve, so that when Don Miller purchased the
    22        rights to Puerto Rico, he was purchasing rights of a
    23        company that we had, if you will, defaulted and was in the
    24        process of defaulting it.
    25
    26        Fred Turner gave instructions that -- Don Miller had begun
    27        to invest a significant amount of money in Puerto Rico, so
    28        there had been signs that this was someone who, perhaps, we
    29        could work with and to cure the operational problems.
    30
    31        So, Fred Turner wanted me to impart to him that we were
    32        encouraged by that, but insisted upon him moving to Puerto
    33        Rico in order to carry out what needed to be carried out.
    34        He refused to do so.  Fred Turner then instructed me after
    35        a period of time -- this happens over a period of time --
    36        not to provide any further assistance to Don Miller as we
    37        would continue to pursue our default proceedings.
    38
    39   Q.   What happened to Mr. Miller in the end, so far as
    40        McDonald's are concerned?
    41        A.  After I was -- I no longer visited there.  There was
    42        reconciliation between Don Miller and the union via the
    43        NLRB process, and his operation continued for several
    44        months after that, four to six months.
    45
    46   Q.   Are we out of 1974 by now?
    47        A.  Yes, I would say that we are in 1975 or close to 1975,
    48        but I would say it is probably around 1975.  Then for
    49        financial reasons he closed the stores.
    50 
    51   Q.   Did McDonald's subsequently open up stores in Puerto Rico? 
    52        A.  In 1980, in San Juan, there was -- just clarification 
    53         -- there was one store that continued to remain open.  It
    54        was in Ponsai which is on the other side away from San
    55        Juan.  It is an hour or two away.
    56
    57   Q.   Is that something to do with this?
    58        A.  No, it has nothing to do, Pansai has nothing to do.
    59
    60   Q.   You subsequently opened up again in San Juan?

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