Introduction
The fast food industry has been hit hard by the pandemic, with many restaurants closing their doors and filing for bankruptcy. One of the most notable casualties is the once-popular burger chain, Eat This Not That. The chain has been struggling for months, and now the government is taking action. The U.S. Department of Justice has filed a lawsuit against the chain, alleging that it has violated the Fair Labor Standards Act by failing to pay its employees the minimum wage and overtime pay. In this article, we’ll take a look at the lawsuit and what it could mean for the future of Eat This Not That.
This Collapsing Burger Chain Is Now Being Sued By the Government — Eat This Not That
The fast-food industry has been hit hard by the pandemic, and one of the biggest casualties has been the burger chain Eat This Not That. The company, which was founded in 2018, has been struggling to stay afloat and is now facing a lawsuit from the government.
The lawsuit, which was filed in the U.S. District Court for the Eastern District of Virginia, alleges that Eat This Not That violated the Fair Labor Standards Act by failing to pay its employees minimum wage and overtime. The lawsuit also claims that the company failed to provide its employees with proper meal and rest breaks.
The lawsuit is seeking back pay for the employees, as well as damages for the violations. If the government is successful in its lawsuit, Eat This Not That could be forced to pay out millions of dollars in back wages and damages.
The lawsuit is yet another blow to the struggling burger chain, which has been struggling to stay afloat since the pandemic began. The company has closed dozens of locations and laid off hundreds of employees in recent months.
The lawsuit is a reminder that the fast-food industry is not immune to the economic fallout of the pandemic. It is also a reminder that companies must comply with labor laws or face serious consequences.
If you’re looking for a burger, it’s best to avoid Eat This Not That and opt for a more reliable option. There are plenty of other burger chains that are still open and serving up delicious burgers.
The saga of the collapsing burger chain BurgerIM has taken yet another turn. On Monday, the U.S. Attorney General filed a lawsuit against BurgerIM and its founder Oren Loni in federal court in California, citing breaches of the Federal Trade Commission Act.
The lawsuit accuses BurgerIM of misleading franchisees about the viability of its business. It claims the chain was defrauding and overselling to veterans and mostly inexperienced investors and then backed out of its promise to refund thousands of franchise fees worth $57 million in total.
For more fast-food news, check out 8 Worst Fast-Food Burgers to Stay Away From Right Now.
This isn’t BurgerIM’s first run-in with the government. In February of last year, the company was ordered by the state of California to pay about $4 million in fines for violating state and federal franchising laws—and to refund its operators the millions owed in franchise fees.
For those unfamiliar with BurgerIM’s story: The chain is a California-based business that got its start in the late 2010s, selling slider-style burgers at its restaurants across the West Coast. The chain expanded rapidly between 2016 and 2019, growing to 200 stores and acquiring about 1,200 franchisees, making it “the fastest-growing emerging chain” in the U.S. in 2018.
Business appeared to be booming until 2019, when the company’s founder, Oren Loni, fled to Israel, and BurgerIM announced to its franchisees that it was considering a bankruptcy filing.
Subsequent reporting by Restaurant Business confirmed that BurgerIM, in its early years of operation, was more akin to “a pyramid scheme” than a legitimate quick-service chain, with inexperienced franchisees being charged $50,000 to join the company—before being left to their own devices. Indeed, BurgerIM has accused its founder, following his departure to Israel, of stealing the $57 million that the company owes its franchisees in refunds.
The federal government’s involvement in the refund may be of limited use. The chain has admitted to its franchisees that it doesn’t have enough money to fully refund the fees, promising little more than “pennies on the dollar.”
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