Burger King franchisee’s discounting mistake costs them $12 million

A discounting mistake has cost one of the U.S.’s biggest Burger King franchisees more than $12 million.

New York-based Carrols Restaurant Group, which operates 1,032 Burger King restaurants, has admitted to mistakenly giving customers a double discount on Whopper meals earlier this year.

The discounting error resulted in a revenue reduction of $12.4 million for the franchisee in the first nine months of this year and a net loss of $8.2 million, the Syracuse Post-Standard reports.

The company was offering two Whopper Jr. burgers for $4, two Whoppers for $5 and two Double Whoppers for $6.

They tried to get customers to trade up with fries and drinks but accidentally gave them additional discounts.

The customers were supposed to be charged normal prices for fries and drinks but were instead given them for lower value meal costs.

It caused the restaurants to lose roughly $1.50 on every sale.  

‘It was not an accounting issue. It was not a systems issue. It was a mistake,’ CEO Dan Accordino said on the company’s third quarter earnings call last week.

‘We screwed up, and it cost us a fair amount of money.’

‘We spent a lot of time dealing with this convoluted mistake. ‘The fact of the matter is, it was a mistake. We screwed up. The underlying business is stronger than what our numbers reflect.’

He went on to call the mistake a ‘one-time error’. 

The franchisee realized the mistake in late August.  

The franchisee’s stock fell 8 percent following the news.

After the error was corrected, revenue rose 7.9 percent in September. Revenue in the third quarter was 4.5 percent.