Raising Cane’s, which is known for selling chicken, is currently in a bit of a pickle after being banned from selling chicken at one of its new Indiana locations.
According to The Northwest Indiana Times, Raising Cane’s is suing to get out of a 15-year lease agreement. The company signed the lease and began working on the location. However, after signing the agreement with Schottenstein Property Group, the company was told about the situation.
The previous owner of the location already granted McDonald’s the exclusive right to sell chicken products at the shopping center. In court documents, Raising Cane’s attorneys stated that the defendants created a “scheme to induce” for the lease. The defendants didn’t disclose the agreement with McDonald’s before signing the lease.
“Unbeknownst to Raising Cane’s, years before the lease was negotiated and executed, another tenant, McDonald’s, was given the exclusive right to sell chicken products at the shopping center,” the documents reveal. “Despite knowing that the entire business model of Raising Cane’s Chicken Fingers is premised on the sale of chicken fingers, the defendants did not disclose this issue before the lease was executed.”
Raising Cane’s Addresses ‘No Chicken’ Conflict at New Indiana Location
The court docs also reveal that the defendants specifically represented Raising Cane’s that there was no exclusivity right that would conflict with the restaurant chain’s ability to operate its location. The defendants also didn’t tell the company it wasn’t allowed to sell chicken until nearly eight months later.
“Incredibly, the defendants did not tell Raising Cane’s it would be unable to sell its chicken fingers at the shopping center until nearly eight months later,” the documents continue. “After watching Raising Cane’s spend nearly a year of time and over a million dollars to develop its new restaurant.”
The attorneys then said that the defendant’s fraud not only consisted of silence and failure to disclose the McDonald’s agreement. The defendants allegedly went as far as selling the chain exclusive right to sell deboned chicken products. This was done while knowing that McDonald’s already had that right.
The company says it was defrauded into signing a 15-year lease. It is also obligated to pay more than $2 million in rent for a location it cannot use. “Without defendants’ assurances, Raising Cane’s never would have entered the lease,” the documents read. “And never would have spent approximately a year and over a million dollars developing its new restaurant.”
Raising Cane’s went on to share that it has suffered significant damages due to the situation. It is now being forced to find a new location to serve chicken fingers in the area. However, it has already sunk in more than $1 million into building a new restaurant at the location.
