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State of Indiana bans burger franchise from opening new locations; business under investigation

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BARGERSVILLE, Ind. – A new burger franchise called “BurgerIM” was supposed to open along South State Road 315 in April, but it won’t be serving up anything at all.

Now, the man who was set to open that restaurant is explaining why. He and dozens of other restaurant owners say they are finding out the brand has a bit of a dark history behind it.

“We just fell into a trap,” the man, who only wanted to be identified by his initials – R.J. – said. “It was a nasty trap.”

“R.J.” said he was originally attracted to the BurgerIM brand because of its sales model.

“It’s a fast-casual that offers kind of a casual dining atmosphere,” he told CBS4. “But really, what was different about them, was all the different proteins. They were focused on more protein, less carbs. So, they were a mini burger – not a full-size burger – but you still had the full-size, thick patty.”

R.J. said he shelled out nearly $70,000 to open a franchise and lease the space. He worked with town officials, too, to get a drive-thru installed.

“By the time I found out about all the problems, we had three walls up,” he said, disappointed.

R.J. said by November 2018, after he paid his franchise costs, corporate leaders stopped responding to his emails and phone calls.

“There was nobody there and when you would get a response, it would be an email back and it would be, ‘Sorry, I wasn’t available. I was with the kids’,” he recalled. “The person in charge of real estate was always with the kids or the person in charge of architecture was always with their kids and I just couldn’t get – I couldn’t grasp my head around – when do these people actually work?”

R.J. started digging and found other franchisees were having similar issues. Two of the owners who were voicing concern on Facebook were right up the road from him in Carmel.

“It has been tough,” said Dallas and Grant Miller, co-owners and operators of BurgerIM in Carmel. “We just haven’t gotten any help from corporate.”

The Millers spoke exclusively to CBS4 about the challenges they have faced recently. They opened their franchise location in the fall of 2019. The pair said they quickly realized they were on their own. Any time they had a problem or a question, they said no one would return their phone calls.

“It goes to voicemail,” Dallas said. “We have been figuring it out, slowly, this whole time.”

Official documents show BurgerIM promised franchisees training, seminars, advertising assistance and more. The Millers said they never received any of that. They and dozens of other owner-operators nationwide speculate the CEO of the company, Oren Loni, left the country.

CBS4 tried contacting Loni by phone and email. We received one email response back from a man named Michel Buchbut, but we were never able to confirm his role in the company. CBS4 set up a phone interview to speak with him, but Buchbut didn’t answer the phone. We left several voicemails and never got a response.

In February, U.S. Sen. Diane Feinstein sent a letter to the Federal Trade Commission calling for them to investigate.

“I write to ask that the Federal Trade Commission investigate potentially unfair and deceptive practices by BurgerIM, a franchisor with more than 150 locations in California,” she wrote. “BurgerIM experienced dramatic growth from 2017-2019, only to abruptly announce in December 2019 that it may file for bankruptcy.”

Court documents also show Oren Loni has 13 lawsuits filed against him in California, alleging fraud, defamation and breach of contract. Six states have banned BurgerIM from opening any more locations, including Indiana. The Secretary of State’s Office filed a stop order against new locations in February, saying it violated the Indiana Franchise Act.

“We just need people to know us,” Grant Miller said before the pandemic. “We need to have their support.”

The Millers have been working to succeed, even during the state’s shutdown in March 2019. They told our CBS4 photojournalist in July they are considering changing the name of their business.

R.J. is still out almost his entire savings. He told CBS4 he was on the hook for his lease until the landlord was able to find someone else to take over the spot.

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