Managers of franchisee firm “brazenly” stole from it, silent partners say

Silent partners in a local franchisee company say the business’ former managing partners “brazenly used company accounts” to “enrich themselves and their separate businesses.”

“RAD Group has since discovered a rampant fraud,” according to its January lawsuit.

Chris Harper and Austin Toupin became friends while working at a Best Buy in 2004, moved on to restaurants, and formed the franchisee company MCAA Brands in 2018, according to past media reports. They acquired 50 Jimmy John’s locations plus Marco’s Pizza restaurants in Colorado.

Harper and Toupin were the public faces of MCAA, which later renamed itself the Restaurant Acquisition and Development Group, or RAD. They were quoted in news releases and articles touting new locations and talking up their side jobs in real estate and car rentals.

Michael Valentine and Austin Bone were the silent half of RAD Group. Harper and Toupin rented office space, hired employees, found franchising opportunities, obtained a line of credit for RAD, and sent financial reports to Valentine and Bone, those two say.

The silent partners knew the other two had side businesses but were assured those would not distract Harper and Toupin from RAD. By the fall of 2021, however, it was apparent that the managers were not keeping the companies separate, Valentine and Bone’s lawsuit alleges.

RAD Group funds were used to buy two cars for $81,500 that Harper and Toupin leased on Turo, and an additional $15,600 was pocketed by the duo, according to the lawsuit.

Valentine and Bone say the managing members were removed from RAD, agreed to repay the money and promised those were the only improper expenses. Instead, the silent partners soon uncovered a far more elaborate scheme to defraud their company, they now claim.

RAD employees worked for the managers’ side companies while being paid by RAD, and RAD offices and equipment were used by those side businesses, the lawsuit says. RAD also allegedly paid $91,000 for unknown reasons to a maintenance company that Harper and Toupin started, bought car washes for their Turo vehicles, and paid for health insurance for Harper’s mother.

His mother and five other beneficiaries of the alleged fraud are also defendants to the lawsuit.