The Profit - The Simple Greek Lawsuit

This is somewhat old news as this lawsuit was filed in December 2016, but I figured I would do a post about it as I didn't have anything on the site about it.

Mike Ference and Kathleen Kamouyerou-Ference, owners of My Big Fat Greek Gyro from season 2 of The Profit have filed a lawsuit against Marcus Lemonis and ML Foods.  During the episode, the business was renamed to The Simple Greek and the concept of The Simple Greek began selling franchises.  It appears that Mike and Kathleen claim they were frozen out of their business and haven't received the 45% promised.

The full lawsuit can be read here, but some of the highlights are below:

• "On the show, Defendant Lemonis handed a Three Hundred Fifty Thousand and 00/100 Dollars ($350,000.00) check to the Plaintiffs, but after the filming of this segment, a producer asked for the check back. The Plaintiffs were directed to return the check to Defendant Lemonis, and were advised it was a only "prop."
• "Lemonis, or an entity controlled by Lemonis, did provide funding to remodel and restructure three locations, including Mt. Lebanon, McMurray and Market Square, and also opened a new franchise in Highland Park, Illinois. The Plaintiffs were told by Lemonis that the $350,000.00 was invested in the rebranding and redesigning of the existing locations. The Plaintiffs did not receive any money from this investment."
• "Defendants, Lemonis and ML Foods, LLC caused the formation of The Simple Greek, LLC in Delaware on January 21, 2015. However, Defendants Lemonis and ML Foods, LLC organized and operated The Simple Greek, LLC as a business owned wholly by ML Foods, LLC, an entity either wholly owned or controlled by Defendant Lemonis. Defendant Lemonis apparently appointed Sam Lundy to be its President. The Plaintiffs were not included in this organization, which was unknown to them at that time."
• "In early January of 2016, an update and second episode of "The Profit" show was filmed featuring the Plaintiffs and Lemonis at Simple Greek restaurants in both Pittsburgh and Highland Park, Illinois. That show aired on CNBC on January 26, 2016. During the filming of the second show, which was not aired, Defendant Lemonis handed the Plaintiffs a typed document titled "Memorandum of Understanding" (the "MOU"). The Memorandum of Understanding stated that it "clarifies the compensation for Kathleen and Michael Ference who holds [sic] Forty-Five (45%) percent interest in The Simple Greek, LLC." The document was dated January 7, 2016, and was signed by Marcus Lemonis, "President." Plaintiffs also signed the document. A true and correct copy is attached hereto, incorporated herewith and is marked as Plaintiffs' Exhibit A."
• "During the filming of the second episode in Chicago, Defendant Lemonis suddenly offered to "buy out" the Plaintiffs' interest in The Simple Greek, LLC, but the Plaintiffs declined the offer."
• "After the filming of the second episode, the relationship between the Plaintiffs and Defendants began to deteriorate. Sam Lundy had assumed the general management and operations of The Simple Greek, LLC and began to exclude the Plaintiffs from involvement in the business. This also included withholding information about the business operations from the Plaintiffs." 
• "Defendant Lemonis reported that there were more than One Hundred Fifty (150) new franchises sold and opening soon. Plaintiffs believe and aver that there now are more than Two Hundred Fifty (250) franchises of The Simple Greek, LLC that are under contract and in the developmental stages throughout the country. Defendant The Simple Greek, LLC is and has been operating numerous franchises across the country without providing an accounting or any financial information to the Plaintiffs and without acknowledging, but denying the Plaintiffs' ownership interest in The Simple Greek. Plaintiffs believe and aver that The Simple Greek is transacting millions of dollars in business while denying Plaintiffs' involvement in the business and failing to account to the Plaintiff."
• "Finally, on August 16, 2016, Defendant The Simple Greek, LLC sent correspondence to the Plaintiffs unilaterally terminating Plaintiffs' rights to royalties from the franchises. A true and correct copy of this correspondence is attached hereto, incorporated herewith and marked Exhibit F."
• "The Defendants purported to terminate Plaintiffs, have wrongfully withheld royalties from the Plaintiffs, and have excluded them from the operations of the business with the purpose and intent of having them relinquish their ownership rights in The Simple Greek."
• "Finally, on August 16, 2016, Defendant The Simple Greek, LLC sent correspondence to the Plaintiffs unilaterally terminating Plaintiffs' rights to royalties from the franchises. A true and correct copy of this correspondence is attached hereto, incorporated herewith and marked Exhibit F. 49. The Defendants purported to terminate Plaintiffs, have wrongfully withheld royalties from the Plaintiffs, and have excluded them from the operations of the business with the purpose and intent of having them relinquish their ownership rights in The Simple Greek."
• "Defendants established The Simple Greek using Plaintiffs' established business, recipes, know-how and experience, Defendants instituted a plan to freeze Plaintiffs out of their interests."

When Marcus Lemonis got word of the lawsuit, he tweeted to his followers that he will not be bullied and The Simple Greek will thrive.

According to Courthouse News, Marcus Lemonis disputed the allegations in a phone interview saying, "he paid more than $150,000 to renovate the Mount Lebanon, Pa., restaurant, which still operates under the name My Big Fat Greek Gyro, but that the Ferences refused to fork over any royalty fees."

Marcus also said, "Let me be clear: The Simple Greek is a brand new concept that I created. I’m not Santa Claus. I don’t just create a concept and then just hand it over to people for doing nothing. They thought that they were just going to get a free gift. They put no money in; they haven’t done any work; and yes, I definitely committed to giving them a piece of the equity … but I also did that under the presupposition that they would not withhold money from me.”

Finally, Marcus said that this legal battle could appear on an episode of The Profit as the Ferences have a contract with the network that requires them to participate.  So stay tuned....

Franchises have continued to open since the lawsuit was filed and the Ferences are still on The Simple Greek website.  I am not sure if there have been any updates since January 2017 regarding the lawsuit, but will update this post if anything happens.