A ripoff pizza chain too? Restaurant owner sued by Torchy's Tacos for stealing secrets, sued by pizzeria
There may be a serial restaurant food copier on the loose.
Of course, Austin-based Torchy's Tacos is suing the Texas Taco Company for theft of trade secrets, specifically the company's "Taco Bible" that contains recipe and presentation instructions. CultureMap was first to report on the that lawsuit. But it turns out that just may be the start.
CultureMap has learned that Texas Taco Company co-owner Adrian Hembree also has been accused of a similar act by Anthony Russo of locally-based chain Russo's NY Pizzeria.
NY Pizzeria hired a private investigator who got a job at Gina's.
According to a lawsuit filed in Federal Court, Russo accuses Hembree and his partners, including Ravinder Syal, of stealing manuals and other documents from NY Pizzeria to create a new company called Gina's Italian Kitchen. Hembree was both a one-time employee and franchisee of NY Pizzeria, where he had access to training manuals, ordering information, plating instructions and other documents that NY Pizzeria considers to be "trade secrets."
NY Pizzeria had previously filed a suit against Hembree that was settled, but the new suit alleges that Hembree violated the settlement agreement and redisclosed the trade secrets to Gina's.
The lawsuit alleges that Hembree provided those materials to Gina's former CEO Phil Rich and told him to use them because they were "proven." These include the base recipes for Gina's tomato sauce, meat sauce and pizza dough. The pleading calls the extent to which Gina's uses the same ingredients that NY Pizzeria does "mind numbing" and notes that Gina's orders certain ingredients that NY Pizzeria specifically asked distributor Roma's Performance Food to carry.
According to the lawsuit, "fifty percent of the items Gina’s Italian Kitchen purchased from Roma’s Performance Foods in September and November 2012, were identical to items ordered by NYPI, right down to the brand of plastic gloves and cleaning solvents used."
NY Pizzeria hired a private investigator who got a job at Gina's Friendswood location and reported back to NY Pizzeria on its business practices.
"During his work there he observed Defendants and Gina’s employees using NYPI’s Trade Secrets to prepare and serve food, to train new employees, and to operate the restaurants," the pleading states.
NY Pizzeria's auditor also posed as a potential Gina's franchisee and met with Nicola Notaricola, a former NY Pizzeria franchisee who had signed on with Gina's. In a taped conversation with Notaricola, he admits "that the pizza recipes being used by Gina’s were 100%-90% NYPI’s recipes, and that about 30%-40% of the other recipes were NYPI’s."
The suit's final allegation is that Gina's representatives approached NY Pizzeria franchisees about become Gina's franchises instead on more favorable terms than they pay NY Pizzeria. Gina's could do so, according to the pleading, because "the Syal Defendants (aka Gina's), not having had to expend the time, effort and money developing a successful franchise business could pass those savings on to the franchisee by offering the franchisee a greater share of the profits."
To sum up, NY Pizzeria alleges that Gina's stole its secrets (recipes, training manuals, plating techniques, etc), used them to form a new company and admitted it when questioned in undercover stings. In a response to NY Pizzeria's complaint, Gina's categorically denies all of the allegations. It will be up to a jury to determine who's telling the truth.
NY Pizzeria's attorney Joseph Lanza declined to comment on the specifics of the case and referred to the pleading. CultureMap contacted Adrian Hembree for comment but had yet to receive a reply.