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Restaurant chain I Heart Mac & Cheese misrepresented the costs of opening and maintaining locations in violation of the Indiana Franchise Act, according to a complaint issued Tuesday by the securities division of the secretary of state’s office.
The administrative complaint was filed against I Heart Mac & Cheese’s parent company, Mac and Cheese Franchise Operations LLC.
The Florida-based fast-casual restaurant chain opened locations in Westfield, Indianapolis and Elkhart in 2020 and 2021. These locations subsequently closed, and plans announced for restaurants in Avon, Plainfield, Mishawaka and Goshen did not materialize.
In the security division complaint, the restaurant’s parent company is accused of misleading franchisees with the prospect of low startup costs and minimal staffing needs to sell pre-made frozen food. Franchisees were provided an unprofitable business model that made it difficult to attract and retain employees, according to the complaint.
In a 2022 financial disclosure document, I Heart Mac & Cheese indicated that between $276,200 and $755,000 is needed to open a restaurant. A $35,000 initial franchise fee was included in the projected cost.
The financial disclosure document failed to mention prior lawsuits involving I Heart Mac & Cheese executives, according to the securities division complaint. Once open, struggling franchisees were threatened with lawsuits, according to the complaint.
“When individuals use deceptive means to convince victims to invest, our securities division is committed to safeguarding the time and money of these Hoosiers,” Secretary of State Diego Morales said in a written statement. “Business owners across our state work hard to keep their doors open and have enough challenges to overcome. They should not have to deal with misleading methods.”
Fishers residents Matt and Elizabeth Griffin were the franchisees who opened I Heart Mac & Cheese restaurants at 637 E. State Road 32 in Westfield and at 910 W. 10th St. in Indianapolis. Franchisee Nilesh Soni opened the Elkhart location.
In 2023, the Indiana Securities Division issued a cease-and-desist order that revoked the registration of Mac and Cheese Franchise Operations LLC and stopped the company’s ability to open locations in the state.
Editor’s note: Attempts to reach representatives of I Heart Mac & Cheese initially were unsuccessful. Following the publication of this report, attorney Kevin Ayers responded with the following statement: “The allegations involve technical reporting violations. Mac and Cheese Franchise Operations LLC denies any intentional wrongdoing and intends to vigorously defend its rights.”
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There wasn’t any frozen food sold at the store in Westfield. It was just overpriced and thus the likely downfall (at least from this customers viewpoint)
OMG how difficult is it to make fresh mac and cheese?
Restaurants like this and Panera are quickly becoming the same quality as frozen dinners at the grocery store. And eventually people are going to wake up and just go to the grocery and pay 1/3rd of the price.
As someone who visited the Westfield location during its opening week, my firsthand experience was that the franchise owners who were present seemed overwhelmed from the start, serving soupy Mac and Cheese with a wooden spork (2-3+ years later I can remember the wood absorbing the liquid vividly) It’s difficult for me to see corporate’s influence as the primary reason for their failure, considering these issues were evident from week one, yet the franchisees chose to open a second location. This suggests to me that there might have been a disconnect between the realities of day-to-day operations they should have planned for and how they chose to overcome the challenges they faced.