Palm Beach County, FL (RestaurantNews.com) A coalition of franchisees operating 19 of the 38 remaining Hurricane Grill & Wings restaurants has filed a major legal complaint against franchisor Hurricane AMT, LLC. The lawsuit, filed in the 15th Judicial Circuit in and for Palm Beach County, alleges widespread mismanagement, deceptive practices, and financial misconduct in violation of a previous settlement agreement. Franchisees report that this conduct has jeopardized the brand’s future.
Key Allegations from Franchisees
- Misappropriation of Marketing Funds: Franchisees claim that Hurricane AMT collected mandatory marketing contributions totaling 3% of weekly gross sales but failed to use these funds for their intended purposes. Instead, funds were allegedly diverted for unrelated expenses and personal enrichment of executives.
- Breach of Settlement Agreement: The franchisor is accused of failing to provide critical marketing services, resulting in a sharp decline in the brand’s presence and revenue. The number of operating stores fell from 58 to 38, severely impacting franchisee profitability. These issues were raised by franchisees in a prior dispute that resulted in a settlement agreement whereby the franchisor reaffirmed its obligations to Franchisees assert that the franchisor breached the Settlement Agreement.
- SEC Findings and Executive Misconduct: The SEC has charged Andrew Wiederhorn, former CEO of FAT Brands, and other senior executives with misappropriating over $27 million, including franchisees’ marketing contributions. These funds were allegedly spent on luxury expenses such as private jets, first-class travel, and jewelry.
- Negligent Supervision and Misrepresentation: The complaint highlights negligent supervision by Hurricane AMT, which allowed key executives, including Thayer Wiederhorn, to cover up financial misconduct. Franchisees allege they were misled about the financial management and operational support provided by the franchisor.
- Violation of Florida Deceptive and Unfair Trade Practices Act (FDUTPA): The franchisees accuse Hurricane AMT of deceptive business practices that include the unauthorized use of marketing funds and false representations about the financial health and support available to
Plaintiffs Seek Comprehensive Relief
The plaintiffs are demanding:
- A full and transparent accounting of all marketing fund contributions and
- Reimbursement of misappropriated funds and royalty
- Compensation for financial losses incurred due to the franchisor’s alleged
- Coverage of legal fees and court costs associated with the
Statement from Franchisee Coalition
“This lawsuit is about accountability. We believe that Hurricane AMT has failed in their obligations, and we are seeking justice for the damage caused to our businesses,” said a spokesperson for the franchisee group.
About Hurricane Grill & Wings
Hurricane Grill & Wings is known for its laid-back tropical vibe and signature wings with bold flavors. The brand was acquired by Hurricane AMT, LLC, and later became part of FAT Brands Inc.’s portfolio. Recent allegations have raised serious concerns about the management and future of the franchise network.
Contacts:
Alan Burger
McDonald Hopkins
561-472-2963
aburger@mcdonaldhopkins.com
Alaina Karsten
McDonald Hopkins
561-847-2354
akarsten@mcdonaldhopkins.com
