YouTube star Jimmy Donaldson, aka MrBeast, filed a lawsuit Monday demanding that Virtual Dining Concepts shut down virtual concept MrBeast Burger because of the company's alleged poor quality control, "literally thousands of negative reviews," and multiple breaches of contract.
Court documents listed several excerpts of customer reviews, including "disgusting," "revolting," "never had something so nasty," and "likely the worst burger I have ever had." The lawsuit also included a picture posted by a customer showing a MrBeast Burger with allegedly undercooked meat. More than half of the MrBeast Burger virtual restaurants have less than two out of five stars, according to the filing.
MrBeast Burger launched in December 2020 as a delivery-only brand when pandemic restrictions were still keeping customers out of dining rooms. Virtual Dining Concepts is known for its partnership with celebrities, including Mariah's Cookies (Mariah Carey), Pardon My Cheesesteak (Barstool Sports), and Buddy V's Cake Slice. Donaldson's popularity comes from his YouTube channel. It has more than 172 million subscribers, which is third-most on the platform. His earnings are estimated to be the highest of any social media creator.
MrBeast Burger expanded to roughly 1,700 locations in 2022, almost doubling its total from the year before. MrBeast Burger's virtual business accounts for roughly 90 percent of Virtual Dining Concepts' sales, according to court documents.
The lawsuit accused Virtual Dining Concepts of being more focused on building the business quickly so it could pitch its virtual restaurant model to other celebrities as opposed to adequately monitoring the MrBeast Burger customer experience and products. it also claimed the company used Donaldson's name, image, and brand on social media without written consent and registered trademarks throughout the world without permission.
"MrBeast Burger has been regarded as a misleading, poor reflection of the MrBeast brand that provides products to customers that are delivered late, in unbranded packaging, fail to include the ordered items, and in some instances, were inedible," the lawsuit stated.
Donaldson claimed that he complained numerous times and "made every effort to cause Virtual Dining Concepts to fix these significant quality control problems as soon as he learned of them." However, the lawsuit stated the company refused and/or wasn't capable of doing anything.
He sought control by opening a brick-and-mortar restaurant in New Jersey, but the lawsuit alleged that "Virtual Dining Concepts was interested only in developing its own virtual branded restaurant business" and that "little attention was paid to brick-and-mortar."
The filing noted that Donaldson—who hasn't received any proceeds from sales—has taken most of the criticism and not Virtual Dining Concepts. Additionally, it stated MrBeast Burger has caused "material, irreparable harm to MrBeast’s reputation."
The move comes weeks after Donaldson said in now-deleted social media posts that he was moving on from MrBeast Burger because of issues with quality and that the "company I partnered with won't let me stop even though its terrible for my brand."
Ghost kitchens and virtual brands appear to be facing a turning point as customers flock to in-restaurant dining experiences with COVID in the rearview. Nextbite, which supplies Thrilled Cheese and Super Mega Dilla for IHOP, went through multiple rounds of layoffs and was sold to Sam Nazarian's C3 platform. Also, third-party platforms have cracked down on virtual brands that don't meet certain requirements. Uber Eats has removed 8,000 digital restaurants from its system since March, Business Insider said.