HOBART, Ind. — Raising Cane’s, a restaurant famously known for exclusively selling chicken fingers, is suing a Northwest Indiana shopping center after being told — eight months and over a million dollars in construction later — that it would be prohibited from selling chicken fingers due to a long-standing, undisclosed deal with McDonald’s.
A lawsuit filed by Raising Cane’s in a federal court in Texas alleges that Crossings of Hobart and property owner Schottenstein Property Group tricked the popular chicken finger chain into signing a 15-year lease, that would equate to more than $2 million in rent, while never disclosing that McDonald’s held the exclusive rights to sell chicken at the shopping center located next to Southlake Mall in Hobart.
Raising Cane’s, as part of its push into Indiana, planned to build a double drive-thru restaurant on the site of a former TGI Fridays located on U.S. 30 in front of the Best Buy across from the mall.
“Despite knowing that the entire business model of Raising Cane’s Chicken Fingers is premised on the sale of chicken fingers, Defendants specifically did not disclose this issue before the Lease was executed,” the lawsuit said.
The lawsuit claims that not only did the defendants specifically tell Raising Cane’s that there were no exclusivity rights that would affect their restaurant, but that the defendants even tried to sell Raising Cane’s the exclusive rights to sell deboned chicken at the shopping center “all while knowing McDonald’s had already been sold that right.”
“Incredibly, Defendants did not tell Raising Cane’s it would be unable to sell its chicken fingers at the Shopping Center until nearly eight months after watching Raising Cane’s spend nearly a year of time and over a million dollars to develop its new restaurant,” the lawsuit said.
The lawsuit states that the exclusive rights were given to McDonald’s in 1994 by previous property owners. It goes on to say that not only was the Crossings of Hobart aware of this exclusive deal but that they attempted to “cover up their misconduct.”
According to the lawsuit, a little over a week after Raising Cane’s began construction on the site of a former TGI Fridays, the Crossings of Hobart sent a letter to McDonald’s seeking a waiver of their exclusive rights in order for the shopping mall to secure a lease with Chipotle.
McDonald’s reportedly declined the request.
The lawsuit states that in McDonald’s letter, the golden arched fast-food chain also reminded the property owners that the proposed Raising Cane’s Chicken Fingers would be a violation of the terms of the exclusive chicken rights and ordered the property owner to “immediately cease any such proposal to sell chicken.”
“Despite McDonald’s strong stance, the Defendants said nothing to Raising Cane’s,” the lawsuit said. “Instead, Defendants stood on the sidelines as Raising Cane’s continued to incur over a million dollars in development costs.”
The lawsuit goes on to say that the Crossings of Hobart once more tried to get McDonald’s to waive the exclusive chicken rights days later but McDonald’s again strongly urged the property owners to have Raising Cane’s cease construction.
According to the lawsuit, the defendants didn’t come clean about the exclusive rights until March 22, 2022, six weeks after turning the property over to Raising Cane’s and “silently watching Raising Cane’s spend significant capital demolishing a building to make space for a restaurant the Defendants knew would be implicated by the Exclusive Use Provision.”
Raising Cane’s stated that had the company known about this exclusive deal they never would have signed the lease in the first place.
The lawsuit accuses the defendants of multiple counts of fraud and is seeking millions of dollars in development costs and lost profits along with the lease being voided.