Virtual Dining Concepts on Monday filed a $100 million lawsuit against YouTube star Jimmy Donaldson (aka MrBeast), stating that he refused to honor contract obligations and damaged the company’s reputation.
The move comes a week after Donaldson sued Virtual Dining Concepts over MrBeast Burger and its alleged poor quality control and negative reviews. The lawsuit contained several excerpts of negative customer opinions and a picture of what looked like an undercooked burger. Donaldson claimed in court documents that the company was more focused on building the business quickly instead of monitoring the customer experience. He also accused Virtual Dining Concepts of hurting his MrBeast brand.
In response, Virtual Dining Concepts began its lawsuit by describing Donaldson as 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.” Virtual Dining Concepts listed several examples of him breaching agreements, including not complying with publicity and promotional obligations, not publicly supporting the brand and undermining it, and making untruthful or misleading statements.
Virtual Dining Concepts claimed that after a successful MrBeast popup in November 2020 and highly popular YouTube video, the company planned to open MrBeast Burger in a small number of markets. However, it also alleged that Donaldson pushed Virtual Dining Concepts to open the brand in as many locations as possible. The company stated that it worked to meet his demand and secured partnerships with roughly 300 restaurants across the U.S. to officially launch MrBeast Burger. After immediate success, Virtual Dining Concepts accused Donaldson of pushing for more growth.
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And as the business expanded, Donaldson and his licensing company allegedly “schemed to exploit their leverage and renege on their agreements in an effort to seek a better, more lucrative deal,” court documents stated. One example: Virtual Dining Concepts claimed Donaldson bullied it on social media and threatened to terminate agreements if it didn’t transfer him interests in MrBeast Burger.
This alleged strategy by Donaldson involved making numerous false statements and labeling them as breaches of contract, Virtual Dining Concepts said in the lawsuit. For instance, Virtual Dining Concepts rejected Donaldson’s claim that various complaints about the burgers were a breach of contract.
“There were some complaints about the burgers, as is customary for any burger restaurant, but those were relatively few in number compared to the overall number of burgers sold,” the company stated in the lawsuit. “Every restaurant gets periodic bad reviews and every company that sells product to the public has unsatisfied customers. The reality is that the overwhelming majority of customers were highly satisfied, and the product was excellent.”
Virtual Dining Concepts also pointed out that Donaldson used his huge social media presence to harm its reputation. In June, when responding to a customer about whether he’ll end MrBeast Burger, Donaldson said in a now-deleted tweet, “I would if I could but the company I partnered with won’t let me stop even though it’s terrible for my brand. Young beast signed bad deal.”
The company claimed that the words used by Donaldson had a financial impact in the nine-figure range.
“Donaldson’s baseless and unlawful disparagement had the intended effect: MrBeast Burger’s reputation was materially damaged if not destroyed, customers abandoned the Brand, and Plaintiffs’ hard-won relationships with vendors, partners, and suppliers were shattered,” the lawsuit stated.
There are more than 1,500 MrBeast Burger locations operating in 45-plus states and Washington, D.C., with approximately 200-plus locations internationally covering more than 10 countries. 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.
In his lawsuit, Donaldson alleged that MrBeast Burger has been regarded as “a misleading, poor reflection of the MrBeast brand” that delivers products that are late, in unbranded packaging, and inedible. He also claimed that he complained numerous times, but that Virtual Dining Concepts refused and/or wasn’t capable of doing anything. He wanted more control with a brick-and-mortar store in New Jersey, but stated the company showed little interest in the venture.
Donaldson also stated that he’s taken the brunt of criticism and that his reputation has suffered, but Virtual Dining Concepts slammed this allegation. The company said the YouTube star’s own management company touted that he has more than 430 million followers across his social media channels, that he’s doubled his average views per YouTube video since 2022, and that he has the fastest-growing Instagram and TikTok channels.