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El Salvador puts pressure on McDonald's over debt

Thursday, August 30, 2012

The government of El Salvador is pressing McDonald's to repay a $23 million debt by seizing the company's royalties obtained across its franchises in the country.

The problem started in 2005, when McDonald's refused to pay $23 million to the franchise operator, Servipronto, as compensation for ending their mutual contract earlier than stated.

The government had initially said it would cover up the company's logos across the country as punishment. However, now it has chosen to seize its royalties, which could reach $72,000 a month, said Ricardo Portillo, a comissioner of a San Salvador commercial law court.

Full story (in Spanish)