INDIANAPOLIS – The Indiana Securities Division filed an Administrative Complaint against Mac and Cheese Franchise Operations, LLC (“MACFO”), the parent company of ‘I Heart Mac & Cheese,’ including some of its executives for alleged violations of the Indiana Franchise Act.
‘I Heart Mac & Cheese’ is a fast-casual restaurant that sells macaroni and cheese and grilled cheese sandwiches. The restaurant has been franchised nationwide, leading to many locations nationwide and a handful operating in Indiana. MACFO entered franchise agreements with at least seven Indiana investors and has 16 locations throughout the state.
The Division alleged the following in its Administrative Complaint: MACFO represented ‘I Heart Mac & Cheese’ as a restaurant business with low startup costs that required little prior business experience and a handful of employees to sell pre-made frozen food. However, Indiana franchisees faced ongoing problems related to misrepresented startup and ongoing operational costs, a lossmaking business model that made it difficult to attract and retain employees, and a general lack of support. In addition, MACFO threatened struggling franchisees with lawsuits. MACFO also provided franchisees with deficient “Financial Disclosure Documents” that were supposed to fairly disclose the risks of getting involved with ‘I Heart Mac & Cheese’ but failed to disclose important information about prior lawsuits and the business experience of the executives running MACFO. To sell more locations throughout Indiana, MACFO also misrepresented the franchise’s profitability and demand for locations.
“When individuals use deceptive means to convince victims to invest, our Securities Division is committed to safeguarding the time and money of these Hoosiers. Business owners across our state work hard to keep their doors open and have enough challenges to overcome, they should not have to deal with misleading methods,” said Indiana Secertary of State Diego Morales.
All the ‘I Heart Mac & Cheese’ locations in Indiana have either closed or failed to open, and many franchisees lost significant amounts of money trying to keep their locations operating. In May 2023, the Indiana Securities Division issued a Cease-and-Desist Order, which revoked MACFO’s registration and stopped their ability to open franchises in Indiana.
If you believe you were the victim of a franchise or investment-related fraud in Indiana, you may file a complaint with the Indiana Securities Division online at https://securities.sos.in.gov/general-information/file-a-complaint/.
