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The franchisee who operates a Taco Bell restaurant in Circle Centre Mall has filed suit against Taco Bell and a fellow franchisee in hopes of preventing the opening of Indiana’s first Taco Bell Cantina.
The open-kitchen concept from Taco Bell that brings together alcoholic beverages with Mexican fare is planned at 24 W. Washington St. A Taco Bell operated by Illinois-based Alfarah Restaurant Group of IN Inc. serves customers in the third-floor food court of Circle Centre Mall directly across Washington Street from the planned Taco Bell Cantina.
Alfarah Restaurant Group, based in Orland Park, Illinois, filed its complaint in Marion Superior Court on Nov. 21 against Taco Bell Franchisor LLC and Flynn Restaurant Group LP.
The lawsuit claims the planned Taco Bell Cantina is too close—within one-tenth of a mile—to the mall’s Taco Bell, setting up unfair competition in violation the Indiana Deceptive Franchise Practices Act.
California-based Flynn Restaurant Group is the franchisee that intends to operate the Taco Bell Cantina. Representatives of Flynn and Taco Bell declined to comment when contacted by the IBJ.
In an email filed as evidence as part of Alfarah’s litigation, a Taco Bell executive told Nidal Al-Farah, president of Alfarah Restaurant Group, the Taco Bell Cantina was approved as a new location because the restaurant inside the mall is considered “captive.”
The email describes captive restaurants as locations in malls and travel centers. “Captive restaurants primarily service customers who are visiting the host location (i.e. the mall or travel center),” the email read.
Alfarah argues that the mall restaurant was not defined as a “captive” Taco Bell franchise in its 2018 license agreement.
The lawsuit characterizes the Taco Bell at the mall as being accessible to office workers, convention attendees and other people thanks to downtown skywalks.
Alfarah is seeking an injunction that prevents Taco Bell Cantina’s opening, arguing that the two restaurants would serve the same or substantially similar Taco Bell food.
Although no opening date has been announced for the Taco Bell Cantina, the IBJ obtained a flier for a “VIP Grand Opening” on Dec. 22.
Taco Bell Cantina is expected to occupy the ground floor, basement and mezzanine of the Lieber Building, the site of Sugarfire Smoke House restaurant before its closure in 2020.
Stephen Ferrucci, a Fishers-based attorney representing Alfarah Restaurant Group, told the IBJ that the mall’s Taco Bell is “extremely concerned about the impact the Cantina will have on its business” and that all legal options are being considered.
Alfarah Restaurant Group operates Taco Bell restaurants at Circle Centre Mall, 49 W. Maryland St., and at Merrillville’s Southlake Mall in Lake County
Flynn, the largest franchise operator in the United States, owns Taco Bell, Pizza Hut, Wendy’s, Applebee’s, Arby’s and Panera locations that generate about $4.5 billion in annual revenue, according to industry publication Franchise Times.
Taco Bell is owned by Louisville, Kentucky-based Yum! Brands, which also owns Pizza Hut, KFC and the Habit Burger Grill.
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