The fate of MrBeast Burger, by far the most successful virtual restaurant by unit count, is up in the air after its namesake, Jimmy Donaldson, sues Virtual Dining Concepts citing “low quality” food from the delivery-only brand. The lawsuit comes a few weeks after Donaldson posted his regrets on social media for signing the original contract that launched the brand in 2020.
MrBeast Burger is the fastest growing virtual restaurant of all time.
First reported by Bloomberg, the lawsuit was filed on July 31, 2023 with the Southern District of New York federal district court. Donaldson is the most successful YouTube star in the world with more than 172 million subscribers.
According to the complaint, Donaldson alleges that his complaints about the quality of the food and the customer experience “fell on deaf ears” with Virtual Dining Concepts, the Florida-based parent company co-founded by Planet Hollywood creator Robert Earl.
“Virtual Dining Concepts was more focused on rapidly expanding the business as a way to pitch the virtual restaurant model to other celebrities for its own benefit, it was not focused on controlling the quality of the MrBeast Burger customer experience and products,” the filing reads. “As a result, MrBeast Burger has been regarded as a misleading, poor reflection of the MrBeast brand that provides low-quality products to customers that are delivered late, in unbranded packaging, fail to include the ordered items, and in some instances, were inedible.”
With numerous unsatisfied reviews listed as exhibits, the complaint says thousands of negative reviews have been posted online, and that the brand is ultimately hurting Donaldson’s reputation and relationship with his fans.
“There are literally thousands of negative reviews, articles, and comments from people who are deeply disappointed by the fact that MrBeast would put his name on this product,” the document reads. “Because the entire business is based on the tremendous global value of the MrBeast brand, it is MrBeast himself, and not Virtual Dining Concepts, who has borne the brunt of the (justified) attacks and criticisms.”
Going further, the complaint alleges that VDC “refused and/or were incapable” of rectifying food quality control problems. In addition, the plaintiff claims VDC has “caused material, irreparable harm to the MrBeast brand,” and that the parent company has used Donaldson’s name, image, and brand on social media and elsewhere without first obtaining his written approval and consent.
Planet Hollywood founder Robert Earl is behind the Virtual Dining Concepts platform.
As a highly visible touchstone for the future of the restaurant industry as it appeared during the first months of the COVID-19 pandemic, MrBeast Burger became one of the fastest growing restaurant concepts of all time, quickly surpassing 1,000 total locations.
Last fall, the brand opened its first physical, brick-and-mortar location in the American Dream mall in New Jersey. Its grand opening event drew more than 10,000 people excited to try the non-traditional burger concept, including Donaldson.
At this year’s Food On Demand Conference, Virtual Dining Concepts CEO Stephanie Sollers said the company would continue bringing its virtual, typically celebrity-backed restaurant concepts into the physical world—adding that the term “virtual restaurant” may no longer be applicable in some cases.
MrBeast is seeking a judicial declaration that he has the right to terminate the MrBeast Burger business, with the additional request for damages “for the harm caused by Virtual Dining Concepts’ multiple material breaches of the agreements between the parties.”
The complaint also adds that, “while this business has made millions of dollars, MrBeast has not received a dime.”
This lawsuit comes four months after Uber Eats announced it was removing thousands of duplicate virtual restaurant brands from its online marketplace, which was billed as a response to consumer feedback on the matter and concerns about duplicate virtual brands clogging its app. The company removed more than 5,000 virtual brands from its platform, and reportedly took additional ones off the platform in the subsequent months.
Virtual Dining Concepts fires back
UPDATED 8/03/23 Virtual Dining Concepts (VDC) clapped back at the recent allegations made by Jimmy Donaldson, aka MrBeast, in his lawsuit against the company, claiming the criticisms were “riddled with false statements and inaccuracies.”
The public response from the virtual brand company goes on to call the suit a “misguided, bullying complaint” and indicates MrBeast will face consequences in court.
In court documents, VDC states it serves 10 million happy customers across hundreds of restaurants and claims the complaint is a “thinly veiled” attempt to distract from Mr. Donaldson’s and Beast Investment’s breaches of agreements between the parties.
The document reads that Donaldson recently attempted to negotiate a new deal, with VDC claiming the move was to serve his own monetary interests and that when VDC “refused to give up more of the company to him, he filed this ill-advised and merciless lawsuit.”
In addition, in response to Donaldson’s allegations that MrBeast Burger is tarnishing his personal brand citing negative reviews and comments, VDC argued that the YouTube star’s profile has grown “exponentially” since MrBeast Burger began, thanks in part to the brand itself. Adding that “VDC consistently strives to improve quality and customer satisfaction,” and that the negative reviews cited by Donaldson came from “a small minority of customers.”
As the lawsuit is just firing up, VDC says it’s “business as usual” for MrBeast Burger and its merchants.
Food On Demand will continue to keep you updated as this story unfolds.
