A Michigan restaurant chain now makes unexpected closures following a ‘family feud over the business’, sources report.
Lefty’s Famous Cheesesteaks, Hoagies, & Grill, which once boasted 52 stores across the country, now has just 20 spots open after the closings.
This Detroit-based fast food chain was founded in 2012 and expanded to 11 locations by 2020.
Then, a franchise agreement that year quickly ballooned its footprint to over 50 restaurants in multiple states.
But now the chain is down to a total of 17 locations in Michigan, 2 in Florida, and only 1 in Ohio.
This major change has come since the owners became embroiled in a legal battle with each other, MLive reported.
The first Lefty’s was opened by restauranteur Sam Berry, who initially placed all interests in his mother’s name, Nayfe Berry, as he was a recent cancer survivor.
In early 2020, Sam met with his mother’s cousin, a Florida-based businessman named Allie Mallad.
Mallad became the minority owner of the chain, saying he wanted to help franchise the company.
The business agreement, established on April 17, 2020, said that Mallad would receive 20% equity ownership of the chain, plus 20% “off the top” commissions as he grew Lefty’s on a national scale.
Lefty’s reached a total of 52 locations in just two years across Michigan, Ohio, California, Florida, and Texas, according to court documents.
However, Berry now alleges that Mallad abandoned the business and didn’t do his part.
Berry claims to have set up the out-of-state locations that Mallad didn’t open.
As part of the 2020 agreement, Mallad could build up to 20 new Lefty’s locations without having to pay any fees or royalties himself, according to MLive.
He opened 18 of his own royalty-free locations, but ended up closing 11 locations.
Mallad closed eight restaurants in Michigan, two in California, and one in Ohio.
Seven more locations were removed from the company’s website last year, according to MLive.
Three more Michigan spots closed this year, bringing the total closures up to 18. Only 20 locations are still listed on the chain’s website.
Mallad filed a lawsuit seeking an unspecified amount of damages for profits lost as well as the right to buy out the Berrys’ share of Lefty’s.
He claimed in court documents obtained by MLive that the closures were due to product quality issues with suppliers – not due to poor sales.
He also alleged that the Berrys didn’t properly share all of the money entitled to him as a minority owner, according to the Detroit Free Press.
Per court documents, the businessman also claimed that Berry damaged the brand with his behavior, which allegedly included posting videos of himself swearing and showing off cash while wearing Lefty’s gear.
In a countersuit that has since been dismissed, Berry said that Mallad showed “a pattern of dishonesty and bad faith.”
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
A beloved grocery chain now confirms unexpected closures across the Northeast taking place by the end of the year.
Grocery chain Stop & Shop has announced that a total of 32 underperforming locations will shutter in the U.S.
The company said the select stores across the Northeast will be closed before the end of the year.
Stores in New Jersey, Massachusetts, New York, Connecticut, and Rhode Island will close by November 2.
In May, the company announced the coming store closures.
“Stop & Shop has evaluated its overall store portfolio and made the difficult decision to close underperforming stores to create a healthy base for the future growth of our brand,” company president Gordon Reid said, per a July 12 press release.
The company’s president added that the closures were essential “to create a healthy base for the future growth of our brand.”
Fortunately, employees will be offered other positions within the company, according to a press release.
The grocery outlet first opened in 2014 and currently has around 400 stores and 60,000 employees, per Fox affiliate KRLD.
Stop & Shop is owned by Ahold Delhaize which also owns Food Lion, Giant Food, and Hannaford.
Which grocery stores are closing?
In New Jersey, 10 locations will close, while only seven will close in New York.
Rhode Island will see two closures and Massachusetts, the home of the first location, will be closing eight.
Five stores will also be closing in Connecticut.
As other chains such as Walmart and Amazon join the grocery business, it has pushed traditional grocery stores out of view, reports The-Sun.
Stop & Shop hopes the closure of underperforming stores will create “future growth” for the company.
Also Read: Retirees Will Now Receive More Money For Social Security
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