YouTube superstar Jimmy Donaldson—better known as MrBeast—has been sued by the partner in his burger business, with the company claiming his “bullying” and “wanton conduct” has left a bad taste in its mouth—and caused some $100 million in damages.
With 173 million subscribers to his flagship MrBeast channel, Donaldson is the most-followed creator on YouTube.
As well as finding success with videos of himself counting to 100,000 and tipping a delivery driver with a house, Donaldson has established himself as a philanthropist and entrepreneur in the food industry.
However, a core ingredient of the 25-year-old YouTube star’s food business has soured.
Virtual Dining Concepts (VDC)—the company with which Donaldson joined forces to roll out his MrBeast Burger brand—countersued the social media megastar on Monday, a week after he took legal action against the firm for allegedly making his namesake food “disgusting.”
In a lawsuit filed to the Supreme Court of the State of New York, VDC said Donaldson and his firm Beast Investments must be “held accountable for his contractual breaches and other misconduct.”
This “wanton conduct” allegedly included publicly undermining the brand, denying VDC access to jointly owned social media accounts, making untruthful statements, and interfering with VDC’s prospective business advantages.
Forced transfer
The company also accused Donaldson and his team of trying to pressure VDC into transferring him part of its interests in MrBeast Burger and threatening to terminate their agreement if the company didn’t agree to his demands.
“Donaldson bullied Plaintiffs on social media and threatened to terminate the parties’ agreements if Plaintiffs did not accede to his demands. In so doing, he fabricated a number of purported 'breaches' of the parties’ agreements, each of which was demonstrably false,” VDC alleged.
“For example, Donaldson latched onto various complaints about the burgers themselves as a breach of contract—it was not. There were some complaints about the burgers, as is customary for any burger restaurant, but those were relatively few in number compared to the overall number of burgers sold.”
Legal documents seen by Fortune cited a number of social media posts where Donaldson had publicly labeled the partnership “a s**t deal” and a “harsh lesson” that had been “terrible for my brand.”
VDC said Donaldson’s actions had caused it “enormous financial harm,” and noted that last year almost 70% of the 2 million orders that had been placed via Door Dash and Uber Eats had resulted in five-star reviews.
In a statement on Monday, VDC’s lawyers said the company’s case was “about a social media celebrity who believes his fame means that his word does not mater and that he can renege on his contractual obligations without consequence.”
“He is mistaken,” they said.
VDC’s legal team also accused Donaldson of materially damaging the reputation of the company and MrBeast Burger, turning away customers, and shattering “hard-won relationships with vendors and suppliers.”
“[He is] damaging the bottom lines of hundreds of restaurants across the country and around the world, and causing damages to VDC that, according to VDC’s evidence and Mr. Donaldson’s own estimations, are in the nine-figure range,” they alleged.
The company claims in the lawsuit that is entitled to recover all these nine-figure losses plus punitive damages and interest.
Representatives for Donaldson were not immediately available for comment when contacted by Fortune.
Ghost restaurant
Donaldson and VDC launched MrBeast Burger in 2020 as a ghost restaurant—a delivery-only service where menu items are prepared in the kitchens of partnered restaurants. After an initial launch in the U.S., the business was expanded to additional international markets, including the U.K., Australia, and Sweden.
By July 2021, Donaldson was announcing on Twitter that he had already made $100 million in revenue from the U.S. business. When the burger brand launched its first brick-and-mortar location in New Jersey last year, he claimed to have broken a world record after a reported crowd of 10,000 fans showed up for the opening.
It was later reported that the social media star was eyeing a $1.5 billion valuation for his business empire.
‘Business as usual’ as legal battle rages
Despite the financial success of his foray into the food sector, Donaldson’s lawsuit accused Florida-based VDC of allegedly compromising on quality as it sought rapid expansion. He is asking a judge for permission to terminate the partnership.
Within three months of launching MrBeast Burger, the partners had sold 1 million burgers, according to Donaldson’s lawyers, and by 2022, 1,700 restaurants had signed up to join the ghost kitchen chain.
However, customers soon started complaining about the quality of the food, posting negative reviews where they labeled MrBeast Burger offerings “disgusting,” “revolting,” and “inedible.”
VDC hit back at the allegations, labeling Donaldson’s lawsuit “meritless” and accusing the YouTuber of using “bullying” tactics to get his own way.
“The complaint is riddled with false statements and inaccuracies and is a thinly-veiled attempt to distract from Mr. Donaldson’s and Beast Investments’ breaches of the agreements between the parties,” the company said in a statement at the time.
“VDC looks forward to being vindicated in court. In the meantime, it is business as usual for MrBeast Burger and VDC, and we look forward to serving many more happy customers.”
