Why did MrBeast sue his own business partner over MrBeast Burger?

MrBeast Burger launched in late 2020 as a delivery-only ghost kitchen brand and quickly reached thousands of locations, yet quality failures and unpaid royalties turned the partnership toxic. Beast Investments, Jimmy Donaldson’s company, sued Virtual Dining Concepts in 2023 to stop the brand from using his name and image. The suit claimed VDC scaled fast while ignoring complaints that customers called the food inedible.

Partnership origins

Donaldson supplied promotion through his massive YouTube and social reach. VDC, founded by Planet Hollywood creator Robert Earl, managed kitchen partnerships and operations. The agreement gave Beast Investments a royalty of either fifty percent of profits or two percent of net sales, whichever was larger.

Expansion moved quickly. By the end of 2021 the brand reported more than one thousand locations, and that number topped seventeen hundred the next year. Revenue hit triple digits in the first seven months, yet no royalty checks reached Beast Investments.

Early customers noticed problems right away. Reviews mentioned undercooked meat, missing items, and high prices. Donaldson later said the food was “terrible for my brand” in now-deleted tweets, but VDC kept signing new kitchens.

Quality complaints pile up

Thousands of negative reviews blamed Donaldson personally. Yelp screenshots and customer photos became key exhibits in court. The complaint states VDC focused on pitching the virtual-restaurant model to other celebrities rather than fixing product standards.

Donaldson asked to shut the project down, but VDC refused. Internal texts showed him describing the original deal as “fucked” and discussing plans to renegotiate for a bigger stake once sales proved the brand’s value.

By mid-2023, Donaldson publicly stated he wanted out. VDC countered that his comments were harming sales and supplier relationships, setting the stage for mutual breach claims.

Trademark and likeness disputes

Beast Investments alleged VDC registered trademarks using Donaldson’s name without consent. The suit also claimed the operator used his image in marketing materials after he withdrew support. Donaldson sought an injunction to stop further use of his likeness.

VDC maintained that the licensing terms allowed continued operation even without active promotion. Court filings show the company registered domain names and social handles tied to “MrBeast burger” months after Donaldson stopped posting about the product.

Judge Jennifer Schecter later called the review evidence “very compelling” during a January 2026 hearing, yet she questioned whether Donaldson could prove lasting brand damage worth the damages sought.

Royalty and accounting claims

Beast Investments argued that millions in revenue should have triggered payments under the contract. VDC produced no detailed accounting and claimed the royalty formula was never finalized. The absence of records became a central issue in pretrial motions.

Donaldson’s team requested financial statements and supplier contracts. VDC resisted, citing competitive sensitivity. The judge ordered limited discovery on revenue figures while keeping supplier identities sealed.

Without payments, Donaldson claimed the partnership had no remaining value. VDC responded that any shortfall resulted from his public criticism rather than operational failures.

VDC’s countersuit

VDC filed its own claims alleging breach, disparagement, and tortious interference. The company sought more than one hundred million dollars, arguing Donaldson’s tweets and lawsuit caused lost kitchen partnerships and a sharp sales drop.

Some counterclaims were dismissed in 2024 and upheld on appeal in 2025. Core allegations of interference and breach survived, keeping both sides exposed to trial risk.

Internal messages revealed Donaldson discussing a “giga brain play” after the suit: win termination rights, relaunch with a major chain, and sell the refreshed brand for three to four hundred million dollars. VDC called the strategy evidence of bad-faith negotiation.

Public reaction and media coverage

Creator-economy outlets framed the case as a cautionary tale about licensing deals. Fans on social media split between those who blamed VDC for poor food and those who saw Donaldson trying to escape a contract once the brand succeeded.

Restaurant-industry trade press noted that several chains, including Red Robin, began exiting virtual brands altogether. The MrBeast burger episode accelerated that trend as operators questioned whether celebrity tie-ins justified quality headaches.

Donaldson’s audience largely sided with him once screenshots of complaints circulated, yet VDC’s statements reminded readers that neither party had presented full evidence in court.

Current case status

The consolidated case sits in New York Supreme Court under index number 653908/2023. A hearing in January 2026 produced no settlement, and the judge urged both sides to find a “business solution” before trial later this year.

MrBeast burger continues at several hundred locations, down from its peak. The brand operates without Donaldson’s promotion or endorsement, and new customer complaints still surface on delivery apps.

VDC’s attorney told the court they look “forward to having our day in court,” while Donaldson has repeated that he would have ended the project years ago if contract terms allowed.

Creator economy implications

The lawsuit highlights risks when influencers license their name without ongoing quality control. Rapid expansion through ghost kitchens can generate revenue quickly, yet it also multiplies points of failure that damage the licensor’s reputation.

Industry analysts note that future deals may require stricter audit rights and termination clauses tied to review scores. Brands that once chased celebrity partnerships are now asking for performance guarantees before signing.

Donaldson’s experience shows that even massive social reach cannot fix product problems once they reach the public. The case continues to shape how creators structure licensing agreements in 2026.

Next steps for both parties

Settlement talks remain possible before the scheduled trial date. A buyout of VDC’s interest or a revised royalty structure could resolve the royalty and likeness claims without further public filings.

If the case proceeds, discovery on revenue and marketing materials will test both sides’ narratives. The outcome will likely influence how other creators approach virtual-restaurant ventures built around their personal brands.

MrBeast burger still exists, but the partnership that created it has collapsed under competing claims of quality failure, unpaid royalties, and alleged interference. The final ruling will decide whether the brand can continue using Donaldson’s name or whether the entire operation must rebrand.