There is a restaurant ruckus in Ridgeland. Ruth's Chris is closing by May 1 and will leave the Jackson area yet again. It was rumored that Shapley's would move into the Ruth's Chris site. However, such will apparently not be the case. The original owner's of Shapley's are trying to take their restaurant back as well as the use of the "Shapley's" name in federal court. Mark Shapley, Mary Shapley, and Shapley's Inc sued Koestler Inc. in U.S. District Court Wednesday. Koestler is the current operator of Shapley's Restaurant.
The Shapleys opened their restaurant in 1985 in Center Park in Ridgeland. The restaurant quickly became very popular as it was known for its tasty steaks, fine dining, and impeccable service. It soon outgrew the strip mall and moved into its current spacious and swanky home in Ridgeland. The Shapleys decided to exit the restaurant business and sold the assets such as the equipment and inventory, leased the building, and leased the use of the Shapley's name to Koestler, Inc. in 1998. Scott and Julie Koestler own Koestler, Inc.
The lease had a term of ten years with an option to renew through June, 2018. The plaintiffs state they they own the "Shapley's service mark" and that Koestler can not use the mark outside of the lease nor outside of a 50-mile radius of Jackson. The purchase price was $1.69 million. The complaint charges Koestler began working behind their backs to steal their name ten years later:
Shortly after the execution of the First Amendment, Defendant instituted plans to usurp exclusive ownership in the Mark for itself.Koestler eventually obtained his registration in 2009. However, Mark Shapley asked the Trademark Trial and Appeal Board in 2017 to cancel the registration because the application was fraudulent. He said Koestler never owned the Shapley's mark although he claimed he owned it in the application and thus had no right to register it as a mark with the federal government. The two sides are currently slugging it out before the Board.
24. Notwithstanding the Plaintiffs' prior and rightful ownership of the Mark, Defendant filed a federal trademark application to register "Shapley's" for "restaurant and bar services" on August 5, 2008 (Application Serial No. 77/539,217) (the "Application"). See Ex. D, Application.....
The Shapleys state that the defendants can not use the Shapley's mark after June 30, 2018. However, they claimed they discovered more skullduggery on the part of Koestler:
31. On or about November 1, 2017, Mark Shapley sent a letter to Scott Koestler expressing an interest in discussing the possibility of a new lease and use agreement and also pointing out that the parts of the APA that provided for a non-compete and provided an exclusive license to Defendant to use the name "Shapley's" or "Shapley's Restaurant" within a 50 mile radius of Jackson, Mississippi, will expire upon the expiration of the Lease. Mr. Koestler did notThe Shapleys apparently have other ideas for the use of their restaurant and good name. They asked the court to declare that they own the "Shapley's" mark and that Koestler does not have any right to use it after the lease expires on June 30. A injunction to prevent Koestler from using the "Shapley's" name after June 30 is requested as well. They ask the court to cancel the registration of the "Shapley's" mark.
respond.
32. On or about January 26, 2018, Mr. Shapley sent Mr. Koestler a notice to vacate the leased property by June 30, 2018 and to carefully and thoroughly adhere to all the components and conditions of the Lease. Mr. Koestler did not respond.
33. Upon information and belief, Defendant intends to open a restaurant on or around May 1, 2018 in the space at Renaissance at Colony Park in Ridgeland, Mississippi that currently houses Ruth's Chris Steak House and plans to call it "Shapley's."
Attorneys Stephen Carmody and Karen Howell of Brunini Grantham represent the Shapleys. The case is assigned to U.S. District Judge Halil S. Ozerden and Magistrate Linda Anderson.
68 comments:
Looking forward to seeing the Answer to get some 'splainin' on this one.
Scott bought all intellectual property when he bought the “goodwill.”
Marks lawyers drafted the agreement and defined it.
Mark loses.
10:40. Read the complaints do the lease agreement before you opine on something you know nothing about
10:40. Read the complaint andthe lease agreement before you opine on something you know nothing about
Here comes the Jackson Restaurant Brigade, gloating at the closing of a Ridgeland eatery.
Before you all get started, take note that Ruth's Chris is not relocating to Jackson. Maybe it's because there are far too many "great restaurants out the ass" in the capital city.
Yep, gotta be why there isn't a Ruth's Chris opening at the corner of Highway 80 and Valley Street.
10:40. The lease says he had the right to use Shapleys name only during the term of the lease.Its very clear
I repeat, once again, my utter amazement at the expertise on this blog about every subject under the sun.
Yeah 10:40
Read the complaint and the exhibits where what you said is stated.
Oh.
That’s why the complaint was so screwed up? Cause he had to explain why scott didn’t buy the IP with the good will
Ohhh yeah....
Notice pleading is nice.....I notice this smells like a turd.
Ruth Chris is probably closing due to two things. I bet the rent is outrageous and they keep messing with their menu. Corporate has ruined the chain. People liked Ruth Chris for steaks and the simple side items they offered. Anyone remember the asparagus and heart of palm salad? Now they change things up, want to offer more seafood, change sides all the time and get rid of the sides and desserts. Do a few things really well and stick to it rather than a bunch of things half-assed.
THE RENAISSANCE AT COLONY PARK continues to take hit after hit. MINT went out of business as well as several retail shops scattered throughout the development. A friend of mine said there were 15+ vacant spaces available to lease...some of the 15 have had two tenants in them with both going out of business. The metropolitan area of Jackson does not have the wealth to support this high end development. I understand Mr. Barksdale has a lot of money but by the time Bailey and Mattiace (Barksdale's Minority Partners)get through fleecing him he will be broke. The Real Estate Development business will eat your lunch even if you know what you are doing and Barksdale is depending to much on his Partners who are the masters of fleecing.
@11:27, really? No one said anything like that.
You Madison types are the ones who gloat when something goes south in another city (Jackson).
@11:27 AM - No one in Jackson is "gloating" that Ruth's Chris is closing in Ridgeland. The loss just reflects the climate of the restaurant industry - lots of competition for little demand. Their market was not Jackson and their market was not Ridgeland. Their market was a small demographic that could afford a $100+/person meal. Before they opened there were already plenty of great fine-dining options all around the metro area. Chains are going to struggle against locally owned and operated restaurants that have a vested interest in their home community.
I bet we haven’t seen all the relevant documents.
The answer will probably provide the rest of the story.
Steak.... yum! I'm off to SAM's. $100 Outback gift card for $80! Or, maybe I'll get a whole beef tenderloin and fire up the green egg!
Getting the jumbo tub of popcorn out for this one...Also, the Renaissance lease costs are higher than anywhere in a tri-STATE radius. The rent + cam for the largest spaces, and I think Ruth's had the most(or close), is astronomical.
Problems at Shapleys? What is Bo Bounds going to do? After this, if Four Roses Bourbon gets in a dispute, his head will explode.
I would ask you to check the links below to other posts on this blog:
Chauncey the Jackson Gastronome sneers at Madison County's "pitiful" eateries
Chauncey deigns to educate the "pot-bellied dirt clods" who dine in Madison
Stamford, whom no one remembers, brags eloquently about Jackson's "great restaurants out the ass" while insulting outsiders
A golden oldie in which a Jackson Cheerleader claims that Jackson is rebounding from the "Renaissance attacks" and that Parlor Market is "the best restaurant within 100 miles"
There are others. Plenty of people who harbor some weird nobility in poverty notion love to come around and take potshots at the "dirtclods" in Madison and brag about their 5 or so fine restaurants (PM, Char, Lou's, Walker's, and one to be named later) while dismissing ANY restaurant in the suburbs as sub-par, etc.
Roosters was pretty good to me.(tried them for the 1st time last week) $100 bucks could feed 6 easy.
Maybe the new Costco down the street could use the abandoned Ruth’s Chris location to serve their free cheese and miniature quiche Samples
ruth's chris is overpriced and isn't really that great of a steakhouse. i've been twice--both times the steak wasn't top quality, the sides were bland, and you really didn't feel like it was worth the money. There are plenty of places to eat a good steak in the metro area.
Shapley's Restaurant will not last one year at the Ruth's Chris location because of the base lease rate and the enormous expenses that are passed straight through to the tenant. All in, the per square foot price will exceed $40.00 and that does not include utilities. The Jackson metro area can not support a high end restaurant in the RENAISSANCE CENTER location.
The Eastern Shore Center, in Spanish Fort, Alabama (Mobile) is a carbon copy of the RENAISSANCE and did not last long. The bank foreclosed on the development in 2016 with $64 Million owed to the bank and when it was finally sold last year the selling price was under $29 Million. I hope Barksdale does not get caught in this trap.
Amen @ 2:30. I've eaten there several times over the last few years, and always on somebody else's dime. I'm glad I didn't waste my money on very average food. At roughly $100/head to eat at RC, no wonder they are shutting down. I won't miss them.
@11:38 Two points: 1) Rest assured Jim Barksdale will not go broke during his lifetime. 2) The neighboring Costco is being developed by the same team and will prosper - despite the hysteria in Greenville Plantation...
Just curious if anyone else remembers this or if I'm dreaming. I'm remembering a Ruth's Chris in Jackson in the 1970's, where The Green Room is now, formerly several other places including The Schooner probably just before RC and originally (at least I think orginally) Jackson's first and for a long time only Mexican restaurant, Mexico Lindo?
Never fear! Costco will be here! They'll save the day by bringing in the high-end clients. Go go Ridgeland go.
The only thing I ever purchased and really owned that had an expiration date was a carton of milk
I would much rather eat at the place next door. I think it's Local 463.
The original Ruth's Chris on Broad Street in New Orleans is in a building that looks a lot like Doe's in Greenville. Something about the contrast makes the steak taste better. The restaurant in Renaissance is in a shopping mall, no matter how that mall is tarted up. Madison County has wealthy residents, but most of them are up to their hair roots in debt. Not as much discretionary income as one might expect.
Louis LeFleur -
RC was once in what is now the Green Room. Moved from there to Northpark where Widow Watson's had been. Closed after some time being there.
My last two visits to Ruth Chris were completely ruined by groups having birthday parties. Loud, obnoxious and arrogant tables pushed together with no respect for the other patrons.
Allowing a "Shoney's party" in their facility was pure stupidity.
Very little forgiveness in the restaurant business.
This brings up a point I often think about, RENT. Retail here seems to have to set up where the rent is a deal breaker, you can tell yourself that with such a prime location, it must be worth it but it will win every time. It is not good for anyone, not the owner or business owner or community. That is one of the issues here. Should be some reasonable rent in Jackson since it is the oldest but with the crime, no one wants it. This makes all the small business have to go with outrageous terms and then they do not make enough to stay in business.
I bet Orvis is the next to go in that development. Maybe Seafood Revolution.
Went to seafood revolution recently. Totally lackluster. It will be closed in a year too.
No more of the usual Jackson v Madison v Ridgeland v BFE comments.
March 9, 2018 at 11:38 AM - I am QUITE sure that you do not know Mr. Barksdale, the nature of his partnerships, nor how much money he has. What you should know is that he is very smart and very shrewd in his business dealings, and he chooses his partners wisely. Stop your ridiculous commentary. One of these gentlemen must have fired you at some point.
the late Tom Moran from Baton Rouge owned the original Ruth's Chris in Jackson and hired his good golfing buddy Tico Hoffman to run it. The two had a parting of the the ways, (not too acrimonious) and Tico opened his place and Tom closed Ruth's Chris. He swore that he would never open another store in Jackson.
Tom later opened several more R C's throughout the US, including one in Chicago. The Chicago store was at one time the top producing R C in the US.
I have a family member that worked at the new R C and after hearing some of the stories she told me, I'm not surprised that their closing their doors.
KF you should know all about Tom and T J's Ribs in BR. Tom was a huge supporter of the Tigers and all things LSU.
Been to TJ's quite a few times. He bought Billy's Heisman Trophy.
The Shapley 'boy' originally came to Jackson (Ridgeland) to open an offshoot of the original Doe's Eat Place. It flopped. They (The Signa family) had some insane idea about running a catering truck/van from Greenville to the location in Ridgeland. This was way the hell back four decades ago almost.
So, the Shapley 'boy' branched out on his own and the rest is history. He and the Koestler 'boy' have always been best buds. But, even at that, a best bud does not have the authority to rip off your name and trade label. Koestler loses and opens a hot dog stand.
Pretty ridiculous to act like the Shapleys are responsible for the success of the restaurant bearing their name and the Koestlers are squatters. The Koestlers paid $1.7 million for the restaurant and have successfully run it for 20 years. If the restaurant has reflected well on the Shapley name in the last two decades, they have the Koestlers to thank for that. I don't know what outcome of lawsuit will be, but the tone of this post treats the Koestlers as if they are nothing more than mid-level management and that's silly.
While the in-fighting goes on, Tico is laughing all the way to the bank!
At this point, whatever the outcome, whatever the local steak customer perceives as "Shapley's" is, after 20+ years, actually Koestler's. What's in a name?
I am sorry that Ruth Chris is closing. However, I haven't eaten there in three or four years. The reason is the last time I ate there it took over two hours from start to finish and my butt hurt so bad I had to stand up every fifteen minutes or so for relief!
I have very little dog in this fight, but a little background:
I have had two experiences with Shapley's in the last 2-3 years. Both were $100-plus a person business dinners. We were on the hook for one and another company paid for the other. Both were parties of about 8. The service was OK at best, but the food was laughable.
I have direct knowledge of one tab which was well over a grand (with reasonable wine and cocktails) for 9 people. No one ordered anything they would not have ordered on their own dime and no one in the party would have winced at a $200.00-plus tab per couple for a "dinner date" when paying out of their own pockets.
I haven't been back, haven't sent anyone and have no intention of being the person encouraging returning (and it wouldn't be on our list even for a "it'll do" as a place to go, for, well, anything). The steaks were grocery-store steaks, prepared haphazardly, the sides were no better and the salads were cafe-grade. All that said, why is this place a topic of conversation, other than just another ripoff wannabe "steakhouse?"
I guess my question is, "If Ruth's Chris is bailing, why would anyone think this place could, should or would make it?"
First of all - if the name wasn't part of the goodwill, purchased for over a million bucks- that's ridiculous.
Sounds like fraud and bait and switch.
Secondly - you folks that judge a place on "well this was there and it closed, so the spot is no good" are ridiculous.
There is way more to a restaurant being successful than just being in the right location. And this location is good, the owner of RCSH lives in Mobile and probaly didn't want to fool with it anymore. You have to have a good staff and some people to make the thing work, not just the brand. Which is why Scott and Julie will likely crush it it in that location.
It's laughable to hear some of the restaurant critics here, I've had good and bad meals in every place in town. It's just how much you notice and how critical you are.
2:17 am
Good!
More room for me and my clients!
"I guess my question is, "If Ruth's Chris is bailing, why would anyone think this place could, should or would make it?"
Probably because they have 'made it' quite well for the past thirty years?
Shapley's made a name for itself decades ago. Koestler benefited greatly from the Shapley name and product brand. Ely's (Shapley's dad was named Ely) is doing quite well.
I'm not real clear on who owns the rights to what or which, if either, is moving to the soon-to-be-vacant Ruth's.
I can't speak for anybody else, but when we go out for steak, I choose a free-standing building, not something tucked inside the corner of a mall. Something that has at least some ambiance, not just a swinging glass door between a nail salon and a blue jean joint. And it's a definite plus if you can see the guy grilling steaks. Think Como Steak House.
I do know that if you're taking the family to any steak place in Madison you might as well stay home, break out the iron skillet and fry bologna. Add cheese. Lotsa pepper.
Times Change...
Eat more steak.
Thanks, 7:41 PM! We're from Greenville, and those names sounded familiar (and not in a good way). Reading that those people have/had restaurants near us, was like being in Fayetteville, Arkansas, and having a cousin point-out the new 'Doe's Eat Place'. NOOOOOOOooooo..... It wasn't as sickening as learning that we're not the only Mississippians who have a place in 'The Hamptons' - but almost.
The Uncle who moved to Fayetteville, REALLY wanted to move to Juneau ("...as far from Mississippi as we could get"). And, when Doe's opened in Fayetteville, he said to his wife, "Told you we should have moved to Alaska." Her reply sums up how I'm feeling, right, now: "We could move to the MOON, and the first thing we'd find, would be somebody from Mississippi."
There's no place in the Universe, far enough away.
9:21 am
Scott and Julie bought the biz.....for around 2 million....the IP is defined and was sold to scott in the goodwill proviso.
The lease was designed to keep mark from opening another “shapleys” steak house within 50 miles.
Of course Elys opened despite that and even tried to use the same recipes...but didn’t call it shapleys.
Now mark wants to pretend a whole sale biz purchase excluded the name usage because of an ambiguous lease?
Sul will frown on this interpretive dance.
15 vacant business locations at Renaissance? If that's true, in a few years, look for Renaissance to have a Western Sizzlin', nail salons, cash for title businesses, and a store front church.
Mark 'tried to use his own recipes' at his new business? Well, how clever of him, 12:41.
You sound like you have some inside info on the ambiguous lease. When you have an ambiguous legal document, guess what else you have.
There's nothing clever or particularly novel about any recipe you'll find on a steak house menu. Oh wait....Asparagus Ely.
50 plus comments. About a squabble over the name of a steak place. The movie Idiocracy comes to mind. Y'all stay up late tonight and continue this battle.
Read the document. Mark Shapley will (and should) win the case easily. He retained all ownership of the name during the lease terms. Koestler tried to backdoor him with a Federal trademark and illegally claimed sole ownership of a name (which he did not solely own under original 1998 agreement).
The business was sold.....
Mark agreed not to open another shapleys nearby....and the building was leased.
When you buy “goodwill” and the IP is allocated in the document as purchased....what’s left to discuss.
4:35; While you sit on your porcelain throne with the Clarion Ledger realizing 'idiocracy' is not a word.
Did Mark recently lose a bunch of money? Why come after Scott 20 years later? Certainly Mark doesn’t think Scott paid a couple of million dollars to babysit his biz
9:01 " 'idiocracy' is not a word. "
http://www.imdb.com/title/tt0387808/
Oh really?
If you had any self-awareness you would probably be embarrassed to realize you may be the only person ignorant enough to offer an opinion despite being totally ignorant of our shared culture (yay movies!) We know what 4:35 meant.
Shapleys has always been my favorite restaurant since I moved to Mississippi. The service is top notch, the management and hostesses always greet us with a smile and seat us quickly, the food is always cooked to perfection and the wine list is never ending! I am always bringing friends and family from out of town to my favorite hot spot. Throughout the years of coming to shapleys I have always noticed That the owners, Scott and Julie Koestler have been up there working every single time I came in. I do not personally know the Koestler’s but I have seen Mrs. Koestler working while carrying all three of her children in her stomach and never once not looking happy or not having a smile on her face while she works up front. Julie is a very sweet and social person that connects and makes everyone she talks to in the waiting room feel special. Scott is always cooking and when he makes his appearnces outside of the kitchen he always stops by tables and talks to customers. Now as I come in 20 years later, I have met their two lovely daughters who have taken part of their parents business. Seeing the whole family work at the restaurant as a team makes shapleys a special place in my heart. These are the people that care about what they are putting out and love seeing people leave happy and full. Why would Mark Shapley just now after 20 years come back and pitch such a fit? Is he losing all of his money or just wanting to ruin a sweet family’s life? I wish the best for the Koestler’s and cannot wait to see where things go for them. If they end up losing the Shapley’s name then they should definitely put their name in the new title so all of the shapleys lovers will know where their amazing memories and meals are. If Mark shapley opens a new shapleys I hope the best for him as well but I will never be a customer of his after what I have seen and heard of what he is doing.
Scott and Julie can go open a Koestler’s and live happily ever after
I'm going to second that thought. The Koestler's should use their name and walk away instead of using the name that Mark Shapley has turned into damaged goods.
(idiocracy is not a word)
"If you had any self-awareness you would probably be embarrassed to realize you may be the only person ignorant enough to offer an opinion despite being totally ignorant of our shared culture (yay movies!) We know what 4:35 meant.March 11, 2018 at 10:10 AM"
So much for your self-awareness and 'shared culture', 10:10. If you had either, you'd probably know that unless capitalized, even a movie title is not necessarily (and in this case is NOT) a word. And I'M the ignorant one here?
"Ruth's Chris is closing by May 1 and will leave the Jackson area yet again."
But if you call Ruth Chris, the people answering adamantly deny it is closing. What is the truth?
1:38, why do you want to know so badly that you call and harass people at their job? Bless your heart.
Who really gives a shit - both are overpriced, overrated restaurants.
10:07
yes, you are. Someone else typed "idiocracy", not me. Nevertheless, they effectively communicated their point to all readers except you, who focused on trivia.
"When you buy “goodwill” and the IP is allocated in the document as purchased....what’s left to discuss."
That's about the fourth time you've rattled on about the purchase of goodwill without offering any proof whatsoever that it occurred, or, if it did, that branding and name registration were included.
“March 10, 2018 at 2:17” you’re either the owner of Ticos or an inexperienced simpleton who smothers their steak in ketchup while ordering it well done, and then gets mad when it’s charred and tastes funny. Please go enrich yourself before making assanine comments.
Now, could you please show us on the doll where Shapley’s touched you?
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