Instagram-Favorite Soft Serve Chain SomiSomi Sued for $450K by SGV Franchisee

A Temple City franchisee of Instagram-popular dessert chain SomiSomi is suing the brand for $450,000 in damages for allegedly violating two laws established by the state to protect franchise owners, namely the California Franchise Investment Law and the California Franchise Relations Act, and for the company’s alleged misuse of funds earmarked for marketing purposes, according to court documents. Lauren Lim, the franchisee of the Temple City location, alleges in court documents that SomiSomi, whose offices are headquartered in Los Angeles’s Koreatown, unfairly terminated a five-year agreement signed by the two parties, set to expire in 2024. In addition, court documents allege that SomiSomi misrepresented the brand and its proprietary systems, including training materials and trade secrets, to Lim. The documents allege that SomiSomi collected 2 percent of sales from its nearly two-dozen franchises intended for marketing purposes, but less than 7 percent of collected funds were spent on advertising. The majority of the funds paid for personnel not connected to the SomiSomi brand, according to court documents. On March 22, a separate complaint was filed, alleging diversion of marketing funds to SomiSomi CEO Matt Kim’s other brands, including Sul & Beans, at the expense of SomiSomi franchisees. Lim, along with…
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