Aarus Enterprises LLC v. Burgerim Group USA, Inc. was filed in the Superior Court of California for the County of Los Angeles on February 15, 2022, seeking civil damages from a fraudulent investment scheme involving the purchase and sale of fast-food burger franchises. Specifically, the complaint alleges promissory fraud, intentional misrepresentation, and concealment.
Plaintiffs include over fifteen individuals and entities who invested in the burger franchises. The Defendants are the burger franchise Burgerim Group USA, Inc. (“Burgerim”) and unnamed individuals who participated in the scheme.
Plaintiffs contend they were presented the chance to invest in Burgerim, which represented itself as the fastest growing fast-food burger franchise. Burgerim told investors they could purchase a franchise for $50,000, a portion of which could be financed or paid later. Burgerim also offered to assist with real estate transactions in opening the franchise restaurants. But Burgerim did not deliver on those promises. Instead, it gave investors unrealistic financing options and unworkable estimates for construction timelines and costs. Burgerim also hid from investors that it used new franchisees’ fees to repay existing franchisees and received kickbacks from vendors, real estate agents, and other representatives.
On February 16, 2021, the California Department of Financial Protection and Innovation issued a Desist and Refrain Order against Burgerim, ordering it to refrain from violating the Franchise Investment Law, Cal. Corp. Code §§ 31000, et seq., and pay an administrative penalty over $3 million for existing violations. It further ordered Burgerim to refund all franchisees. According to Plaintiffs, Burgerim has not complied or refunded them.
In the four-count Complaint, Plaintiffs sue for promissory fraud, intentional misrepresentation, and concealment based on Defendants’ false representations and intentional omissions that induced Plaintiffs to invest in the Burgerim scheme.