CALIFORNIA – California regulators have imposed sanctions on I Heart Mac and Cheese, demanding thorough monitoring over the next three years due to various disclosure violations in their franchise documents.
The fast-food franchise, in conjunction with the California Department of Financial Protection and Innovation, has reached a consent agreement this week, which includes a fine of $43,000.
The agreement also stipulates that I Heart Mac and Cheese (IHMC) must fund an independent monitor to ensure compliance with franchise regulations. This monitor will submit annual reports to the department overseeing the chain.
California thus becomes the second state to penalize IHMC for franchise disclosure violations. Previously, Indiana had ordered the company to cease selling franchises in its territory last year.
IHMC’s infractions date back to 2017 when the company failed to disclose lawsuits or legal settlements in its franchise documents. Additionally, California also cited it for selling a franchise after its disclosure document had expired, as well as for refusing to provide documents related to eviction proceedings.
Since its establishment in 2016, the chain has been embroiled in controversies. I Heart Mac and Cheese offers customizable macaroni and cheese bowls and opened its first branch in Florida in the year of its founding, later expanding through the franchise model. However, the chain has faced multiple lawsuits in various states, including legal actions brought by franchisees.
