1851

According to a&nbsp;<a href="https://www.restaurantbusinessonline.com/financing/franchisees-sue-i-heart-mac-cheese?utm_source=1851franchise.com&utm_medium=article&utm_campaign=restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese-2728171" target="_blank" rel="nofollow">recent article on Restaurant Business Online</a>, three franchisees have filed a lawsuit against the fast-casual chain&nbsp;<a href="https://iheartmacandcheese.com/franchise?utm_source=1851franchise.com&utm_medium=article&utm_campaign=restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese-2728171" target="_blank" rel="nofollow">I Heart Mac and Cheese (IHMC)</a>, alleging misleading sales tactics and violations of federal franchise disclosure laws. The lawsuit, filed in Florida state court, accuses the franchisor of using "false promises and illegal sales practices" to lure passive investors into the system. Franchisees claim they were misled about the business model's operational costs, profitability and risk factors. They also allege the company failed to disclose critical information, such as corporate store closures and evictions, in violation of franchise disclosure rules.The lawsuit highlights several grievances, including that&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-i-heart-mac-cheese-franchise-costs-fees-profit-and-data-2724069#stories">IHMC</a> "deliberately omitted" information about widespread closures of corporate stores in Florida, Georgia and New York and failed to disclose litigation against its CEO,&nbsp;<a href="https://www.linkedin.com/in/steve-giordanella-622b139/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese-2728171" target="_blank" rel="nofollow">Stephen Giordanella</a>. Franchisees also say they were misled about financial performance, with verbal assurances that one location generated $1,800 in daily lunch sales and that another store in Florida earned $700,000 annually. These claims were not documented in the franchise disclosure documents, a violation of federal rules. According to the lawsuit, "Defendants intentionally minimized and misrepresented the actual risks and operational challenges of operating an IHMC franchise."Franchisees also argue that IHMC’s pricing structure and operational costs were unsustainable. For instance, they were told prime costs would not exceed 55% of revenue, which turned out to be false. Additionally, cheese costs fluctuated significantly, with a five-gallon bucket of cheese sauce increasing by up to 140%. The lawsuit also alleges that high menu prices, such as $23.99 for Lobster Mac, alienated customers, reducing business. Operators claim they were required to purchase supplies from designated vendors, who charged inflated prices and paid rebates to IHMC, further hurting franchisees' profitability.The franchisees accuse IHMC of using marketing fund contributions, amounting to 3% of revenue, to finance franchise sales rather than supporting their operations. The lawsuit calls the franchisor’s promises "illusory," with the plaintiffs stating, "Plaintiffs invested substantial initial capital and continued to pay ongoing royalties for what has proven to be a fundamentally flawed and unprofitable business model." The case underscores ongoing tensions within the franchise system, as IHMC also faces regulatory actions in Indiana and California for disclosure violations.Read the original article&nbsp;<a href="https://www.restaurantbusinessonline.com/financing/franchisees-sue-i-heart-mac-cheese?utm_source=1851franchise.com&utm_medium=article&utm_campaign=restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese-2728171" target="_blank" rel="nofollow">here</a>.Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="https://www.1851growthclub.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese-2728171" target="_blank" rel="nofollow">www.1851growthclub.com</a> and start your journey.

I Heart Mac and Cheese - Franchisees Sue I Heart Mac and Cheese - Franchise News - 1851 Franchise

I Heart Mac and Cheese: Franchise Lawsuit Alleges Misleading Practices

1851 Franchise

The franchisees claim the fast-casual franchise failed to disclose “widespread” closures of corporate stores and used illegal sales practices to sell franchises.

Restaurant Business Online: Franchisees Sue I Heart Mac and Cheese

restaurant-business-online-franchisees-sue-i-heart-mac-and-cheese

Crust Pizza Co.

Crust Pizza Co. Spreading Through the Southwest - 1851 Franchise

Crust Pizza Co. Targets Southeast U.S. for Expansion

crust-pizza-co-southeast-expansion

Seniors Helping Seniors®

Nathan Peterson Turns Passion for Helping Others into a Purpose-Driven Business with Seniors Helping Seniors Franchise

seniors-helping-seniors-franchise-caldwell-nathan-peterson

Famous Dave's

Famous Dave’s Fires Up Third Annual All-Star BBQ Series This May, Leading Up to the 2025 World Food Championships

famous-daves-fires-up-third-annual-all-star-bbq-series-this-may-leading-up-to-the-2025-world-food-championships

HomeTeam Inspection Service

From Air Force Veteran to Entrepreneur: Danny Hemchand Builds a Thriving Home Inspection Business

air-force-veteran-danny-hemchand-home-inspection-business

HomeTeam Inspection Service Reports Record-Breaking Performance in Q1, Continues National Expansion

hometeam-inspection-q1-2025-growth-expansion

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Eli Lilly GLP-1 Lawsuits - Mounjaro - Zepbound - 1851 Franchise Agg

Eli Lilly Sues Telehealth Startups Over GLP-1 Knockoffs, Escalating Legal Battle

eli-lilly-glp-1-lawsuits

The Future of Franchising: Trends and Predictions for 2025 and Beyond

the-future-of-franchising-trends-and-predictions-for-2025-and-beyond

Restaurant Business: Crumbl Cools Its Expansion, Refocuses on Profitability

restaurant-business-crumbl-cools-its-expansion-refocuses-on-profitability

Franchise Face-Lifts: Why Major Restaurant Brands Are Betting Big on Remodels

franchise-face-lifts-why-major-restaurant-brands-are-betting-big-on-remodels

How New Tariffs Are Causing Price Hikes and Surcharges for U.S. Businesses and Franchises - 1851

Tariffs Prompt Price Hikes, Surcharges as Businesses (and Franchises) Brace for Rising Costs 

tariffs-prompt-price-hikes-surcharges

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

&pizza - Fast-Casual Pizza Chain Begins Franchising - 1851 Franchise

&pizza Embraces Franchising To Fuel Bold New Growth Strategy

andpizza-franchising-ceo-mike-burns

CFOs See Recession as Likely in ’25; Why Now Is the Time To Water the Franchise Buyer Seeds

cfos-see-recession-as-likely-in-25-why-now-is-the-time-to-water-the-franchise-buyer-seeds

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Most Profitable Restaurant Franchises To Own in 2025 - 1851 Franchise

The Most Profitable Restaurant Franchises to Own in 2025

most-profitable-restaurant-franchises-to-own

Franchise Success Stories: Inspiring Tales from the Front Lines

franchise-success-stories

Image of building outline hovering over person's hand

How To Choose the Right Franchise: A Step-by-Step Guide to Success

how-to-choose-the-right-franchise-step-by-step

Amateur Bodybuilder and Business Partner Bring Passion for Fitness to World Gym Franchise in Fulton, New York

amateur-bodybuilder-and-business-partner-bring-passion-for-fitness-to-world-gym-franchise-in-fulton-new-york

DonutNV Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-donutnv-franchise-costs-fees-profit-and-data

Restaurant Business Online: Franchisees Sue I Heart Mac and Cheese

MORE STORIES LIKE THIS