James Donaldson, a YouTube star better known as MrBeast, has sued his partner in a food delivery business saying the company sacrificed quality in its bid for rapid expansion.
Donaldson’s Beast Investments LLC sued for breach of contract, asking a federal judge in Manhattan for the right to terminate his business relationship with Virtual Dining Concepts, a Florida company co-founded by former Planet Hollywood executive Robert Earl.
Donaldson, who has more than 170 million subscribers to his flagship YouTube channel, partnered with Virtual Dining in 2020. They began selling burger-and-fries combos in December of that year, tapping restaurants and commercial kitchens across the country that were experiencing downtime due to the pandemic. Customers ordered online for delivery or pick up through the MrBeastBurger website or other delivery services, a concept known as “ghost kitchens.”
Thanks in large part to Donaldson’s promotional skills, the partners sold 1 million burgers in the first three months, the suit said. By 2022, they had signed up 1,700 participating restaurants. The burger business became one of many ways in which Donaldson has used his large following on social media to build new enterprises, including the Feastables line of snacks.
Yet it wasn’t long before fans began complaining about the subpar burgers. Customers have posted thousands of negative reviews referring to the company’s sandwiches as “disgusting,” “revolting” and “inedible,” according to the suit. Donaldson said his own complaints about quality control “fell on deaf ears.”
Virtual Dining was more focused on rapid expansion as a way to pitch its restaurant model to other celebrities, Donaldson said. The company’s other offerings include cookies from singer Mariah Carey and Nascar-branded chicken wings.
The company posted Donaldson’s image on social media without his permission, and registered trademarks they weren’t entitled to, according to the suit. Donaldson said his company has not been paid any money from the venture.
Beast Investments LLC v. Celebrity Virtual Dining LLC, Case No: 23-cv-06658, US District Court, Southern District of New York (Manhattan).