McDonald's and Ilac avoid high court
Tuesday February 19 2008
FAST-food giant McDonald's and Irish Life have agreed to go to mediation in a bid to resolve a multi-million euro row over McDonald's branch at the Irish Life-owned Ilac Centre.
McDonald's had initiated legal proceedings against Irish Life because of the "unacceptable conditions" at the Ilac centre branch, alleged to have cost the fast-food giant more than €1m in lost profits and lost "brand presence".
The case was due to be entered into the big business division of the High Court yesterday, however Mr Justice Peter Kelly was told that the parties had agreed to a mediation process.
McDonald's had launched the case against both Irish Life and Joseph O'Reilly who had been engaged to carry out works at the unit.
McDonald's claims that its lease with Irish Life entitles it to have a shop front visible to customers from Parnell Street, as well as a direct-access entrance from Parnell Street.
In 2003, McDonald's says it reached an agreement with Mr O'Reilly and a company, Firmount Ltd, agreeing to certain works being carried out to reconfigure its unit.
While that development is now complete, McDonald's says that the results have not been satisfactory.
Among several complaints, the fast food chain claims that access to the Ilac Centre restaurant from Parnell Street may only be achieved via a plywood tunnel walkway and that the shop front is completely obscured from the view of passersby on Parnell Street.
The tunnel walkway has become a congregation point for people, which obstructs the access of customers and has also become attractive to persons pursuing anti-social behaviour and persons seeking shelter, including overnight shelter, the company said.
Because of this, the company has had to engage security personnel and also to pay for additional daily cleaning services to deal with the tunnel being used as an on-street urinal.
The situation has cost McDonald's some €839,000 in profits to date, as well as an estimated €200,000 loss of brand presence, the fast food giant says, adding that future profit losses are estimated at €2m.
- Tim Healy and Laura Noonan
