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Chicago Tribune
7 days ago
- Business
- Chicago Tribune
Longtime partner in Chicago Joe's Stone Crab sues Lettuce Entertain You for fraud
A longtime business partner is suing Chicago-based Lettuce Entertain You and its co-founder Rich Melman for allegedly squeezing him out of his ownership interest in the chain's popular Joe's Stone Crab restaurants. Gerard Centioli, who formed ICON with Melman in 1999 to expand restaurants such as Joe's Stone Crab in Miami to Chicago and other markets, alleges his equity interests were fraudulently transferred to Lettuce in a 'fake sale,' according to the lawsuit filed Friday in Cook County Circuit Court. The lawsuit also alleges Centioli is owed millions of dollars in annual management fees for the Joe's restaurants dating back to 2018. Centioli had agreed to forgo most of those fees for two years in 2016 and 2017 as a 'good business partner' to help Lettuce preserve needed cash, but the payments never resumed, according to the lawsuit. In addition to Melman and Lettuce Entertain You Enterprises, the lawsuit names R.J. Melman, the co-founder's son who became president of the family-owned restaurant group in 2017 and added the CEO role this year, among the defendants. It characterizes the actions of Chicago's most prominent restaurant family as no less than a 'corporate coup' against its outside partners. 'Richard Melman, for his part, abandoned a friend of over 40 years, betrayed a business partner, and violated a shared legacy in favor of allowing R.J. to consolidate power, resources, and influence for their family's financial gain,' the lawsuit stated. 'This is a tragic end to a proud tradition of partnership, cuisine, connection, and accomplishment.' Lettuce Entertain You issued a statement Tuesday in response to the lawsuit. 'The allegations made by Mr. Centioli are without merit,' Lettuce Entertain You said. 'Beyond that, our policy is not to comment on pending litigation, but we look forward to sharing our side of the story.' Founded in 1971 by Melman and Jerry Orzoff, Lettuce hit it big with its first restaurant, the quirky R.J. Grunts in Lincoln Park, and the company has continued to break new culinary ground and expand its portfolio over the decades. While some names have come and gone, Lettuce owns, manages and licenses 60 brands in 12 states, with offerings ranging from fast casual to fine dining. The highly successful Joe's outposts in Chicago and two other cities, however, stand apart from the restaurant group and were never fully under the Lettuce Entertain You corporate umbrella. Launched in 2000, Joe's Seafood, Prime Steak & Stone Crab in River North was the first expansion of the legendary Miami restaurant, and the first venture for the fledgling ICON, which was composed of Centioli, Melman and a third partner, Michael Fox. ICON struck an exclusive licensing deal with the family that owns the century-old Joe's Stone Crab in Miami to bring the concept to other cities, subsequently adding restaurants in Las Vegas and Washington. The Miami import opened to rave reviews and large crowds in Chicago, and continues to do big business 25 years later. Centioli served as the inaugural president and CEO of ICON. Joe's Chicago entered into a management agreement where Lettuce Entertain You received a fee for operating the restaurant, with a portion paid to ICON, according to the lawsuit. A similar management deal was set up for Joe's Las Vegas, which opened in 2004. ICON's second venture was a January 2000 agreement to expand North Carolina-based Krispy Kreme to other markets, opening up a dozen locations of the beloved southern donut shop on the West Coast. In 2010, in the wake of the Great Recession, Rich Melman decided to slow down ICON's search for other brands to expand, focusing instead on Joe's, Krispy Kreme and the Lettuce portfolio, according to the lawsuit. The three partners then entered into an agreement under which Centioli sold Melman a portion of his indirect interest in the two Joe's restaurants, but continued as a manager of ICON. Centioli also ceded authority over restaurant personnel decisions, according to the lawsuit. As part of the 2010 agreement, Centioli gained the rights to ICON's intellectual property, and the partnership with Melman and Fox changed its name to Stone Dozen. In 2012, Centioni transferred his interests in Stone Dozen to ICONcepts, a corporate entity he created. The partnership between Stone Dozen and Lettuce began to deteriorate soon thereafter. When Joe's opened its Washington D.C. restaurant in January 2014, Lettuce launched it as a subsidiary, cutting Stone Dozen and its non-Melman partners entirely out of the deal, according to the lawsuit. By 2016, the disenfranchisement went one step further, excluding Centioli from all management income in the successful business partnership he helped build with Melman, according to a lawsuit. Centioli and Fox agreed to temporarily forgo Stone Dozen's management fees in 2016 and 2017 after Melman represented that Lettuce 'needs the fees' to help cover its costs, according to the lawsuit. 'It was not until 2024 that Lettuce informed Gerard that they always intended for Lettuce to keep the entire management fee for itself, permanently,' the lawsuit stated. Needing to raise cash to cover tax liabilities during what he believed to be a temporary cessation of management fees in 2016, Centioli's ICONcepts sold a portion of its equity in the Joe's Chicago and Las Vegas restaurants to Melman, along with some equity in Krispy Kreme, according to the lawsuit. In 2018, with both the Joe's restaurants and Krispy Kreme doing brisk business, Centioli approached Melman about 'putting ICON back together' and finding additional brands to add to the portfolio. Gerard and his son, Lauren Centioli, a partner in ICONcepts, began meeting with Rich and his son, R.J. Melman, to discuss the concept they dubbed ICON 2.0. In 2020, they created ICON Consulting as a subsidiary of Stone Dozen to explore new restaurant expansion opportunities. Topping the list was an effort to take Chicago steakhouse Gene & Georgetti's to other markets, following the successful model they created 20 years earlier with Joe's Stone Crab. In 2021, they formed a development partnership with the restaurant that never came to fruition, according to the lawsuit. Another matter for discussion with ICON 2.0 involved call rights, which allowed surviving members to buy out deceased partners' shares. With Centioli's stake vested in ICONcepts – a corporation that would never die – it became an issue for Rich Melman, who wanted to ensure he could pass his stake onto his son, according to the lawsuit. 'The Lettuce Defendants began to perceive betraying ICONcepts as a viable alternative to a good faith negotiation,' the lawsuit stated. 'They would wait, however, to act on this concern while stringing ICONcepts along.' Lettuce did make some concessions during the ICON 2.0 negotiations, notably awarding ICONcepts a 5% stake in Joe's Washington restaurant in 2022, along with a cash payment to cover the taxes associated with the transfer, according to the lawsuit. In December 2022, Gerard Centioli and R.J. Melman 'shook hands' on an ICON 2.0 agreement to settle back management fees and pay a fee/salary going forward to ICONcepts, according to the lawsuit. At that point, Stone Dozen was owed more than $4.3 million dollars, according to the lawsuit, with Centioli and ICONcepts entitled to a portion of that money. 'However, in violation of the Handshake Agreement, Lettuce continues to keep all management fees for itself, effectively embezzling millions of dollars in funds that it knew it was required to remit to Stone Dozen and/or ICONcepts,' the lawsuit states. The strained partnership went further south in 2024 with the corporate ascension of R.J. Melman at Lettuce and the expensive failure of Chicago restaurant Aba in Miami, the lawsuit alleges. Things came to a head earlier this year when R.J. Melman made it clear that he didn't share his father's belief in the ICON model, according to the lawsuit. 'This basic philosophical difference was laid bare at a January 4, 2025 negotiation in which R.J. asked Centioli rhetorically why he would settle for any structure that required sharing 50% with ICONcepts when Lettuce could instead go it alone and take 100% of the equity for itself,' the lawsuit stated. In February, Lettuce repudiated the handshake agreement and in March, formally 'terminated' Centioli, according to the lawsuit. The final salvo arrived on April 15, when Rich and R.J. Melman sent 'fake sale documents' to Centioli purporting to provide notice that ICONcepts had sold its interests in the three Joe's restaurants to Lettuce, according to the lawsuit. 'This sham transaction is the opus of the fraudulent scheme that Defendants conspired to foist upon ICONcepts, Gerard, and his children,' the lawsuit states. Accompanying the sale documents were cashier's checks payable to ICONcepts that 'grossly understated' the value of its interests in the Joe's restaurants, according to the lawsuit. The checks went uncashed and became void after 90 days. Last month, Lettuce deposited the money from the uncashed checks into an interest-bearing account on behalf of ICONcepts, but Centioli 'has never agreed that the buyouts were legally valid or appropriately calculated,' according to the lawsuit. On Friday, Centioli filed a 20-count breach of fiduciary duty and fraud lawsuit against Lettuce Entertain You and the Melmans seeking to declare the buyout transactions invalid, restitution for the restaurant group's unlawful gains and damages. A hearing is set for Oct.10 in Cook County Circuit Court.
New York Times
03-04-2025
- Entertainment
- New York Times
For These French Teens, the Best Beauty Brands Are Not From France
Imagine a ball pit — but one crowded with teens and 20-somethings instead of small children, and filled with biodegradable confetti instead of plastic spheres. That is one way to describe the scene on Saturday at a pop-up shop that Glossier, the American beauty brand, opened last week in Paris to promote the release of its latest fragrance, Fleur. In an area surrounded by purple mesh screens, visitors could plod through the purple confetti toward a tall pile of it, atop which sat a bottle of the new perfume. When a person grabbed the bottle from its perch, the action set off a process that resulted in a personalized poem — composed by artificial intelligence — appearing on a nearby screen. 'You hold fleur with grace / beneath lavender light / your gaze tranquil elegance,' read a poem spat out for a friend of Jeanne Melman's. At 17, Ms. Melman, a high school student in Paris, is part of a cohort that Glossier has made deep inroads with since it was started 11 years ago: Generation Z, or Génération Zède as it is called locally. Ms. Melman went to the pop-up with two friends, both also 17. All three of them said Glossier products were among the American exports that they most highly prized. Ms. Melman recalled the time she tried a Krispy Kreme doughnut after the chain arrived in France in 2023: 'Good but not exceptional,' she said. While visiting a pen pal in Cincinnati last summer, Ms. Melman added, she became acquainted with pickleball, which she 'kind of liked.' Glossier, known for skin care and makeup products that the brand says enhance a person's natural beauty, has been tightening its grip on French customers since 2018, when it started shipping to France. In a country that is home to many iconic makers of perfumes and cosmetics — L'Oreal, Lancôme, Estée Lauder, Chanel — Glossier has managed to find an audience: France ranks fifth in terms of where it has the most engagement on social media, Kyle Leahy, the company's chief executive, said in an interview. But that doesn't necessarily translate to sales in France, partly because pop-ups are currently the only way for the brand's fans in the country to buy products in person; it does not have a physical retail presence there. While waiting in a long line to enter the Fleur pop-up, Clémentine Stahl, a 15-year-old student, gave a reason for Glossier's allure to people her age: It has a 'cooler' image, as she put it, compared with legacy French brands, which 'think more classically.' Typology, a six-year-old French cosmetics brand offering its own take on minimal products, was mentioned by others at the pop-up as having a similar appeal to Glossier. Ms. Stahl was with her 17-year-old cousin, Agathe Bernardi. Glossier was not the only young American beauty brand they liked. Both said they were also fans of Rhode, founded by Hailey Bieber, and Fenty Beauty, founded by Rihanna. Ms. Stahl, as it happened, also said she believed that ' the best pop stars come from America.' Dorothée Thiam, a 20-year-old student studying psychology at Paris Nanterre University, said at the pop-up that she and other Gen Z-ers, no matter where they came from, tended to generally gravitate toward brands that reflected their identities. Ms. Thiam said the ways that Fenty Beauty and Glossier had engaged with Black consumers like herself, for example, played a 'huge role' in drawing her to their products. 'Representation is so important,' she added. 'It's about being able to see yourself in the brands you consume, which makes a big difference.' Marie Olivier, a 22-year-old master's student, said brands that embraced individuality instead of prescribing fixed ideals embodied what she considered a distinctly American trend, one that she had come to appreciate. 'What I like from the United States is the whole self-development type trend,' said Ms. Olivier, who is studying political science at Paris-Saclay University. 'It encourages you, I think, to embrace your own lifestyle, your whole personality, and just to try to be the best version of yourself.' Her sentiment evoked what Ms. Leahy said was the thinking behind the name Glossier: It is a portmanteau that took inspiration from dossier, the French word for folder, and Into the Gloss, the name of the website that laid the foundation for the cosmetics brand and that is known for featuring a diverse collection of beauty routines. (Glossier's first fragrance, You, released in 2017, was marketed with the promise that its formula smelled slightly unique on everyone.) The brand might be beloved by Gen Z-ers, but Ms. Leahy said its reach bridged generations. 'We see mothers and daughters shopping together,' she said. Or fathers shopping without daughters, as was the case with one man at the pop-up. He arrived alone but with clear instructions from his daughter: Take pictures and buy her the new Fleur perfume and some Cloud Paint blush.
