As part of the franchising reorganization segment of Operation Phoenix, Donald N. Smith initiated a restructuring of future franchising agreements in 1978. Under this new franchise agreement, new owners were disallowed from living more than one hour from their restaurants – restricting them to smaller individuals or ownership groups and preventing large, multi-state corporations from owning franchises. Franchisee were also now prohibited from operating other chains, preventing them from diverting funds away from their Burger King holdings. This new policy effectively limited the size of franchisees and prevented larger franchises from challenging Burger King Corporation as Chart House had.Smith also sought to have BKC be the primary owner of new locations and rent or lease the restaurants to its franchises. This policy would allow the company to take over the operations of failing stores or evict those owners who would not conform to the company guidelines and policies.By 1988, parent company Pillsbury had relaxed many of Smith's changes, scaled back on the construction of new locations which resulted in stalled growth of the brand.Neglect of Burger King by new owner Grand Met and its successor Diageo,further hurt the standing of the brand, causing significant financial damage to BK franchises and straining relations between the parties.