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Client Sues Ad Agency, Agency Sues Client… Someone Call The Waambulance


Dear god. Someone call the waaambulance. Steak n Shake, a chain of 490 restaurants in the Midwest, has sued its agency, The Varnson Group after three months on the job. The Varson group has countersued the client (natch) over it’s now terminated 26-month contract that was worth $4.36M.

The Steak n Shake lawsuit, which was filed on March 3rd in Indianapolis, doesn’t go into the details of why the companies parted ways in the first place, but does say that Varson is refusing to turn over proprietary materials, including data and a web site domain. This isn’t a cute look for the company. Steak n Shake has fallen on very hard financial and is also facing another lawsuit from Burger King for copyright infringement.

Meanwhile, Varnson is countersuing saying that Steak n Shake made a deal in bad faith. Apparently, the company had been holding discussions with other ad agencies, including J. Walter Thompson and Zimmerman, before firing Varnson. The burger chain also owes them $1.62 million for work performed with some of that work being done out of Steak n Shake’s local headquarters. The company allegedly insisted that the agency work from there in order to keep an eye on them. Talk about a difficult client. We’re pretty sure that Varnson is glad not to be dealing with the troubled company.

Varson is not going to win on this bad faith angle. Clients can talk to whomever they want, whenever they want about side projects or even, replacing a current lead shop. However, money owed is money owed. For a sordid play by play, head over here.

More: CCO Condon Officially Out at Leo Burnett; Could Ned Crowley Return?

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