A Florida company claiming to have acquired the majority interest in a World of Beer franchise in Key West has sued the chain’s parent company, alleging it reneged on its initial approval of the deal months after the fact.
According to the suit, filed in Hillsborough County Circuit Court, Alfa Professional HR Services, Inc. bought 60 percent of Craft Culture Key West, LLC, the franchisee of World of Beer’s Key West outpost in January.
The deal was approved in February during a meeting with World of Beer’s top executives, according to Alfa’s president, Jeff Conley, who said the meeting left him believing his company was in control of the restaurant.
“We relied on their word as businessmen and immediately started funding the Key West location to save it from financial disaster,” he said in a news release.
No official documents were signed during that meeting that would have cemented the deal, according to Alfa’s attorney, Richard Harrison.
In all, Alfa claims it has invested more than $400,000 into both maintaining restaurant and the overall cost of the sale; $140,000 of that was to pay Craft Culture for its interest in the bar.
But nine weeks after that meeting, the suit alleges, World of Beer “asserted that it had not consented to and approved the transfer” of control of the restaurant from Craft Culture to Alfa. Additionally, according to the plaintiffs, World of Beer demanded a previously unmentioned $5,000 transfer fee and other unforeseen conditions of approval.
Harrison said the new conditions came as a shock as his clients were diligent in making sure everything was taken care of during the February meeting.
“My guy kept asking over and over and over, ‘Is this everything? You got everything you need?’ Because he was going to go out and immediately start pumping money into this thing, because it was foundering,” he told Brewbound. “And they all said yes. No one said a word about any other kind of conditions.”
World of Beer declined for anyone to speak on the matter, but submitted to Brewbound the following statement:
“We appreciate and greatly respect our World of Beer franchisees and partners. We have excellent relationships with our partners system-wide — now numbering nearly 60 locations in 18 states — and we look forward to continuing to grow with our franchise partners and investors. As we enter into new agreements, we make it a top priority to clearly communicate the terms and conditions from the start. As this is an ongoing legal matter, we cannot comment further at this time.”
Harrison, however, said World of Beer now seems to be claiming that the February meeting was not to approve the deal, but rather to vet Alfa as a potential investor.
“It wasn’t just, ‘Hey, come so we can get to know you,’” he added. “These are the most senior guys in the company all saying, ‘Yeah, you’re approved.’ Either that counts for something or it doesn’t.”
World of Beer president and CEO Paul Avery, chief development officer Benjamin Novello, and vice president of operations Robert Jarvis were all present at the February meeting, the suit claims.
Harrison said now there are two possible resolutions he would be content with.
“Either one: Judge, you listen to what happened at this meeting. If you decide that they approved us, tell these people we’re approved and to leave us alone,” he said. “If you decide we’re not approved, they misled us. Have them buy us back out.”