YouTuber MrBeast is being sued by the company that runs MrBeast Burger, a virtual restaurant chain and its ghost kitchens, for failing to honour his contractual obligations and interfering with business—with damages allegedly exceeding $100 million.
Key Takeaways
- Virtual Dining Concepts, VDC, and subsidiary Celebrity Virtual Dining, filed suit against MrBeast—whose real name is Jimmy Donaldson—Monday morning in New York.
- The suit alleges Donaldson didn’t meet promotional obligations and goes further to say he made “disparaging comments” about MrBeast Burgers and VDC that caused irreparable harm, pointing to a number of now deleted tweets in which Donaldson said he wanted to end the partnership and signed a bad deal, according to a copy of the suit obtained by Forbes.
- VDC argues in the suit that the restaurant—MrBeast Burger—and company suffered a damaged or destroyed reputation from Donaldson’s statements, including losing vendors, suppliers and customers, that caused damage “in the nine-figure range.”
- The suit comes just one week after Donaldson sued Virtual Dining Concepts seeking to end their relationship, arguing VDC was giving customers “low-quality products … delivered late, in unbranded packaging” that were sometimes “inedible”—Donaldson was seeking “the immediate right” to end the deal with VDC and undisclosed monetary damages.
- Forbes has reached out to a representative for Donaldson for comment.
Crucial Quote
“This case is about a social media celebrity who believes his fame means that his word does not matter, that the facts do not matter, and that he can renege and breach his contractual obligations without consequence,” the lawsuit against Donaldson reads. “He is mistaken.”
A view inside the first physical MrBeast Burger Restaurant at American Dream on September 4, 2022 in East Rutherford, New Jersey. (Photo by Dave Kotinsky/Getty Images for MrBeast Burger)
Getty Images for MrBeast Burger
Big Number
174 million. That’s how many YouTube subscribers Donaldson’s MrBeast channel has, making him the most-subscribed individual user on the platform. He also has 86 million followers on TikTok, while MrBeast Burger’s TikTok has just 2.2 million.
Key Background
Donaldson opened MrBeast Burger in December 2020 during the Covid-19 pandemic in partnership with VDC after signing an endorsement and services agreement for a four-year term. The agreement at the time was that the delivery-only business would be run by VDC and would use MrBeast’s name, image and likeness to promote the ghost kitchen and virtual restaurant.
The restaurant was successful immediately—it was named “the fastest-growing restaurant brand in the country” by Forbes—and grew to have 1,700 virtual locations in 2022, according to Donaldson’s lawsuit, though Donaldson and VDC differ in which of them pushed for the rapid expansion of MrBeast Burger.
Donaldson argues that as the endeavor grew quality suffered, saying in his suit there are “thousands of negative reviews” online. In VDC’s suit, however, they highlight that on Uber Eats and Doordash in 2022 “70% of customer reviews included 5-star ratings.” The dispute escalated in June when Donaldson implied on Twitter he was closing MrBeast Burger by tweeting “when working with 2,000 restaurants I don’t own it’s impossible to guarantee the order quality” and that he was “moving on.”
This article was first published on forbes.com and all figures are in USD.
