Until last month, Garrett had sold its famed caramel- and cheese-flavored popcorn in the MSNBC.com café located in the Rockefeller Center tourist attraction. Under a five-year deal, the popcorn maker had agreed to pay $20,000 a month in rent -- plus 10% of monthly sales above a certain amount, according to court papers filed in New York State Supreme Court.
But Garrett, owned by a Chicago partnership known as CaramelCrisp, did not make a single payment during the eight months before its clandestine exit Feb. 6, NBCU alleges in court papers. NBCU says that CaramelCrisp's "inexplicable refusal" to pay and decision to leave will cost it $1.2 million ($240,000 a year for five years) and is seeking damages.
A representative for Garrett declined comment.
As Garrett collected revenue from operating in the heavily trafficked New York location, NBCU says the popcorn maker benefited from coverage by the "Today Show" (when the café opened) and digital signage within the store.
"CaramelCrisp never disputed that it owed NBCU the fees," the suit alleges. "It simply decided not to pay." (CaramelCrisp is the party in the lawsuit.)
As Garrett received monthly statements from NBCU, the popcorn company attempted to renegotiate the terms of the deal, court papers say. And NBCU says it engaged in discussions, but it "became increasingly clear that CaramelCrisp was not interested in renegotiating ... (but) merely attempting to put off any payment obligations."
In 2005, the family-run Garrett Popcorn Shops -- a Chicago tradition in the vein of the green mints given away at the now-defunct Marshall Field's -- was sold to CaramelCrisp. The business is a Chicago partnership headed by real-estate executive Lance Chody.
Garrett's tins with mixes of caramel and cheese popcorn have been popular for years; some cost $115 and up. And its flavors were named by Oprah Winfrey as one of her "favorite things."
The company, started in 1949, entered the New York market two years ago with a location near Madison Square Garden. It has four stores in Chicago and several stands in O'Hare Airport.
CaramelCrisp was not the only vendor inside the MSNBC.com café. Coffee purveyor Chock full O'Nuts signed an agreement, and maintains its operations there. The café offers free WiFi and serves as an MSNBC branding opportunity. The NBC Experience Store sells T-shirts, DVDs and other NBC paraphernalia.