Technology

Virtual Dining Concepts sues MrBeast, claiming he undermined MrBeast Burger

The company said the YouTuber’s public criticism of the virtual brand caused up to $100 million in damages. It counters MrBeast’s own lawsuit, which accused the brand of harming his reputation.
MrBeast
MrBeast has been critical of MrBeast Burger. | Photo: Shutterstock

Virtual Dining Concepts is accusing MrBeast of trying to destroy MrBeast Burger.

The company, which owns the virtual restaurant brand in tandem with the YouTube star, on Monday filed a lawsuit against him in New York Supreme Court, one week after MrBeast himself sued Virtual Dining Concepts (VDC).

VDC’s suit alleges that MrBeast, whose real name is Jimmy Donaldson, tried to undermine the brand after VDC denied his attempts to own a bigger piece of it. When VDC refused, it says, he retaliated by publicly criticizing MrBeast Burger, “hijacking” its social media accounts and ultimately taking legal action to have the brand shut down.

These attacks, the lawsuit says, damaged, “if not destroyed,” the brand’s reputation with customers, restaurants and suppliers, amounting to losses in “the nine-figure range.” 

In his own lawsuit, MrBeast argues that negative reviews of MrBeast Burger “irreparably” hurt his own brand and that VDC itself had violated their agreement by using MrBeast’s image without his consent. The complaint includes numerous reviews calling MrBeast Burger “inedible” and “disgusting” and says VDC failed to take steps to correct the issues. 

VDC denied these claims and said the bad reviews represent a small portion of the brand’s customers.

The growing legal dispute has cast a cloud of uncertainty over the future of MrBeast Burger, one of the most successful virtual restaurant brands in the world. 

The brand was born out of a joint partnership formed in September 2020 between VDC and MrBeast, a YouTuber whose elaborate stunts and lucrative giveaways have attracted an audience of hundreds of millions. The endorsement agreement gave VDC the right to use MrBeast’s name, image and likeness to grow the burger brand and also called for MrBeast to support and promote the brand. 

MrBeast Burger launched later that year and became an instant hit, thanks in large part to MrBeast’s massive audience. It has since grown to about 1,500 U.S. locations as well as 200 internationally. These locations are within existing restaurants, which operate MrBeast Burger as a delivery-only add-on and share some of the revenue with VDC.

Though the brand has generated north of $100 million in revenue, MrBeast’s lawsuit claims he “has not received a dime” from the business despite being owed royalties as part of the endorsement agreement. 

And yet VDC alleges that MrBeast last January asked to renegotiate the agreement to give himself a bigger share in the brand. VDC agreed, and the partners also extended the contract from a four-year term to an indefinite agreement.

According to the lawsuit, MrBeast on three later occasions attempted to negotiate an even bigger share in MrBeast Burger. VDC said his terms were “unreasonable or unacceptable” and it denied them. The suit claims that this triggered MrBeast’s efforts to sabotage the brand.

In April, the suit alleges, MrBeast and his team changed the login credentials for MrBeast Burger’s Twitter, Instagram and TikTok accounts, locking VDC out of the shared accounts. The team also deleted posts announcing that the brand was coming to Ireland and Mexico. (MrBeast’s own suit alleged that the posts used his image without his permission, in violation of the agreement.)

Because VDC could no longer promote MrBeast Burger on its own social media accounts, “sales declined and have continued to decline,” the lawsuit said. 

Then in early June, MrBeast in a series of tweets lamented the inconsistent quality of MrBeast Burger’s food and said he wanted to move on from the brand but couldn’t because he had signed “a bad deal.” 

Though some of the tweets were deleted, news outlets including Restaurant Business reported on them. “As Donaldson had planned, the damage was done,” the suit alleges.

VDC argues that all of the above amounts to a breach of its agreement with MrBeast, in which he said that he would support the brand and not disparage it. 

In a statement Monday, VDC said it intends to ask to have MrBeast’s case in the Southern District of New York dismissed for a lack of subject matter jurisdiction.

“In the meantime, it is business as usual for MrBeast Burger and VDC to the greatest extent possible, and VDC looks forward to serving many more satisfied customers and continuing to help the restaurant industry,” VDC said.

A representative for MrBeast declined to comment Monday.

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