YouTube sensation Jimmy Donaldson, or MrBeast as he’s known to his 172 million subscribers, is heading to court claiming his food delivery partner is producing low quality items. MrBeast holds the title of the most-followed individual YouTuber. He is suing Virtual Dining Concepts, claiming the company is taking advantage of his brand instead of producing quality food. He even called it “inedible”. However Bloomberg is reporting that Virtual Dining Concepts is planning to fight back, claiming the court papers are “riddled with false statements and inaccuracies.”
Where it all started for MrBeast
It all started in November 2020 for Donaldson. MrBeast and his best friends hosted a pop-up event in Wilson, North Carolina where fans scrambled to get their hands on free burgers.
Recognizing the potential to grow beyond just being an award-winning digital content creator, MrBeast joined forces with Virtual Dining Concepts. They created a virtual brand called MrBeast Burger. It operates out of existing restaurant kitchens. Customers can only order the burger via the proprietary app or major food delivery service apps.
Where did it all go wrong for MrBeast?
Many customers turned to social media to complain about the appalling quality of the food.
The philanthropist states on his website that it costs around $2 to produce each burger, and has generated over $150 million in revenue. Despite MrBeast Burger’s huge success, he now wants to call it quits with Virtual Dining Concepts citing that his complaints about poor quality control were not listened to. He claims the company relied squarely on MrBeast’s strong brand. The brand expanded rapidly, raising questions about whether quantity compromised the quality.
What lessons can small businesses learn from MrBeast?
Managing fast food restaurants is harder than what it seems. It’s extremely difficult to control the quality of the food going out to customers. Unlike MrBeast’s chocolate bar.
Locate2u CEO and founder Steve Orenstein says it’s easier to work closer with the manufacturer of a chocolate bar, than a fast food outlet. “If you are running a fast food store, you are running thousands of stores across the country, or world. It’s very difficult to control quality. It is a challenge in any business. How do you maintain quality as your business grows? And being able to do it as quickly as MrBeast Burger did. They would have rolled out hundreds of stores across the world over a very short period of time. When they first opened there were thousands of people arriving to order. Being able to come with nothing and then that amount is extremely challenging for any business.”
Outsourcing a core part of a new business to a third party is extremely challenging. Orenstein believes unless there are processes in place to make sure the quality and standards are maintained throughout any franchise across the world, the quality and the taste won’t be the same. “And then suddenly you have to add in delivery. Delivery is very complicated particularly when you are doing fast food. One of the challenges is, everyone wants to eat at the same time. We all want our dinner between 6pm and 8pm. A restaurant will have this huge spike in demand and the number of delivery drivers you need for that period spikes. Suddenly after that period the volume drops quickly. There are ways that you can manage it, but you need to understand how it all operates.”
Orenstein believes MrBeast jumped into the fast food delivery industry too fast, without realizing how complicated it is. Given his massive popularity on YouTube, MrBeast Burgers were a hit from the get go. “It was always going to be difficult for MrBeast to start small, because he has such a huge following. If you are starting a new business, it will give you time to start small and start building out that business, while evolving and changing.”