Burger King Corporation v. Rudzewicz

Burger King's contracts with its franchisees required that these business relationships were established in Miami and governed by Florida law. Burger King was a Florida corporation headquartered in Miami, and its Miami office resolved any major problems with the franchisees and received payment of their fees. However, many different officers at Burger King shared responsibility for regularly monitoring the franchises, which were subject to substantial regulations and supervisory control under the contract terms.

When Rudzewicz and MacShara applied for a franchise through the Burger King regional office in Michigan, their application was forwarded to the Miami headquarters. They were assigned an existing facility in Drayton Plains, Michigan, and they bought equipment for their restaurant from Burger King in Miami. MacShara also attended a required training course in Miami. Both men negotiated with both the Michigan and the Miami offices. During the course of a 20-year franchise relationship, Rudzewicz became liable for over $1 million in payments. Burger King eventually terminated the franchise after lengthy negotiations with the two men produced no results. Rudzewicz remained on the location and continued to operate the restaurant as a Burger King.

Filing a claim in Florida federal court, Burger King pointed out that the Florida long-arm statute provided personal jurisdiction over residents of other states who breached contracts that were formed in Florida. However, Rudzewicz and MacShara argued that the claim did not arise within Florida. The court agreed with Burger King and entered judgment in its favor, but the appellate court reversed on the grounds that the defendants had not received proper notice that they might be involved in litigation in Florida.