From the outside, business at By Chloe couldn’t be better. There always seems to be a line out the door at the OG casual vegan eatery in Manhattan (there are now four in New York City alone, plus the bustling Sweets shop), and outposts are popping up in cities across the country, including inside a Los Angeles Whole Foods.
Which is why it came as pretty startling news when the Wall Street Journal reported that Chloe Coscarelli would be cutting ties with her namesake empire. Apparently behind-the-scenes, things haven’t all been vegan cupcakes and sweet potato fries.
The drama started brewing back in June, when Coscarelli sued her business partner, Esquared restaurateur Jimmy Haber. It was reported that Haber wanted Esquared to open two non-vegan restaurants under Coscarelli’s name, but she was not into it. When he found out she wasn’t on board, he reportedly threatened her, allegedly saying “that she would need a bodyguard if she dared to meet with him in person,” according to Eater.
“Chloe has been trying to undermine the brand and burn it down while we’ve been the ones who have been protecting it.”
You can imagine how tense things have gotten since then, with the situation finally combusting with yesterday’s eyebrow-raising news that the brand’s vegan visionary is leaving the company that bears her name. “Chloe and I founded [the brand] about two-and-a-half years ago. She came to us with the idea of a vegan fast-casual restaurant, but that’s pretty much all she came with,” says By Chloe co-founder and creative director Samantha Wasser (who, full disclosure, is Haber’s daughter).
Wasser explains the duo split the business, with Coscarelli crafting the recipes with Esquared chefs while she took on the branding work, heading up the website, social media, and design of the stores. “Pretty much everything you see that creates the By Chloe identity is all me,” she says. Though it’s not terribly unusual in the business world to have a vision partner and a strategic or creative partner, Wasser says “I even came up with the name, By Chloe—with no input from Chloe. And after we opened the first store, it came very clear that she was putting the needs of her self-interest above the needs of the brand.”
I reached out to Coscarelli’s team, and her publicist said she’s unable to comment at this time, though she has since released a statement on Instagram saying she was “pushed out,” and the whole experience has been “surreal.”
“This year has been extremely painful—one that has challenged me to the core,” she writes. “But I will not let anyone deter my goals. I am committed to being strong and positive, and will continue to champion vegan cuisine and what it stands for.”
Wasser claims that for the past six months, Coscarelli hasn’t been involved with the brand at all. “We’ve opened three locations in the last three months and she’s never been to any of them,” the creative director says. “She’s never even asked how they are going.” Of course, her lack of involvement could have been at the behest of Coscarelli’s lawyers—the chef’s last Instagram post referencing her namesake chain was posted on December 10, 2016, about the same time as the start of the lawsuit.
It’s likely a disappointing outcome for the young entrepreneur who’s lent her Cupcake Wars-winning recipes, bubbly Millennial image, and crazy Instagram-cookbook buzz to the business.
Esquared and Coscarelli have been duking it out in court—and according to Wasser, the court found that Coscarelli could be terminated from the company and forced to give up all her shares. It’s likely a disappointing outcome for the young entrepreneur who’s lent her Cupcake Wars-winning recipes, bubbly Millennial image, and crazy Instagram-cookbook buzz to the business.
“Chloe has been trying to undermine the brand and burn it down while we’ve been the ones who have been protecting it, putting more money in, and taking all the risks to keep the doors open,” Wasser adds. It’s unclear if Coscarelli was on the hook for putting in money into the business or if that was largely what Esquared brought to the proverbial table.
So, what’s going to change now that Coscarelli no longer has 50 percent ownership? As the restaurateur puts it bluntly, absolutely nothing. “She hasn’t been involved in anything for six months and no one’s noticed. This is the best thing that can happen for the company because we can move forward without our hands tied.” Cupcake wars, indeed.
Originally posted March 28, 2017. Updated March 30, 2017.
If you think this is dramatic, it’s nothing compared to the story behind Pure Food and Wine owner Sarma Melngailis got arrested. Bummed by the news? You can always make your own By Chloe smoothie bowl at home.