According to the complaint, I Heart Mac & Cheese broke the Indiana Franchise Act

Indianapolis, Indiana – The Indiana Secretary of State’s office said Tuesday afternoon that the parent business of I Heart Mac & Cheese restaurants in the state is the target of a complaint from Indiana authorities about purported violations of the Indiana Franchise Act.

With 16 locations in Indiana and at least seven investors, Mac and Cheese Franchise Operations LCC was the main firm. In addition to grilled cheese sandwiches, the restaurants sell macaroni and cheese bowls.

In July, Restaurant Business magazine reported that since opening its first location in the United States in 2016, I Heart Mac & Cheese has been the subject of controversy. I Heart Mac & Cheese, with its headquarters in Boca Raton, Florida, is still running eateries in various states.

There were no locations in Indiana listed on I Heart Mac & Cheese’s website on Tuesday.

According to state officials, all of them were shut down when the parent company’s registration was withdrawn, a cease-and-desist order was issued by the Indiana Securities Division in May, and its ability to open franchises in Indiana was suspended.

Google Street View indicated in May that a former location on West 10th Street in downtown Indianapolis had closed, but the building space remained available.

According to a news release from the Secretary of State’s Office on Tuesday, the parent company allegedly offered its franchisees the opportunity to launch a restaurant “with low startup costs that required little prior business experience and a handful of employees to sell pre-made, frozen food.” This is according to the Indiana Securities Division.

The collapse of the Indiana stores was, however, partly attributed to franchisees’ “ongoing problems related to misrepresented startup and ongoing operational costs,” according to the announcement.

The Securities Division’s complaint also claimed that the franchisees struggled to recruit and retain staff and ultimately received little assistance from the parent firm. Lawsuits were also threatened against franchisees who were suffering.

As per the press release, the parent company neglected to disclose crucial information regarding the executives’ business experience and previous lawsuits, thereby providing franchisees with inadequate “Financial Disclosure Documents” that should have fairly disclosed the risks associated with partnering with “I Heart Mac & Cheese.”

To attract more franchisees, Mac and Cheese Franchise Operations LCC allegedly exaggerated the franchise’s profitability and location demand.