Chilly Reception For Chain Rival

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Despite the name, Original Tommy’s World Famous Hamburgers owes its reputation to its chili more than the burgers.

Ladles of the signature stuff are heaped on just about every menu item, from burgers and fries to hot dogs. There’s even a “chili boat” topped with cheese, and slices of tomatoes, onions and pickles.

Now, a messy family food fight is under way involving a competing chili business using the Tommy’s name. And that business is owned by Tommy Koulax Jr., son of late founder Tommy Koulax.

Koulax Jr. has started selling chili of his own online through Tommy Jr.’s Chili Factory, and the rest of the Tommy’s clan is suing to stop him.

Original Tommy’s initially claimed its trade secret chili recipe was being stolen by Tommy Jr.’s, but the recipes are different and the lawsuit was later amended to drop that charge. (Koulax Jr. claims his chili is meatier and thicker. His version even beat that of Original Tommy’s in a taste test by the Orange County Register last year.)

But the dispute is far from cute.

Koulax Jr., 68, claimed he still has a 10 percent stake in Glendale-based Original Tommy’s, and said the lawsuit is just the latest legal attack by family members, who he claimed have tried to take control of his ownership stake.

“It ain’t right what they’re doing to me. I helped build that business with my dad,” Koulax Jr. said. “They think they own the name. They want to keep me broke, because they know I’m broke and can’t fight ’em in court.”

The owners of Original Tommy’s did not return repeated calls for comment. The attorney representing Original Tommy’s declined to comment.

Tommy’s isn’t the first L.A. area-based restaurant chain to be embroiled in an ugly family feud. Control of the Mediterranean food chain Zankou Chicken has long been fought over by two family factions. The feud became tragic in 2003, when owner Mardiros Iskenderian shot and killed his sister, his mother and then himself, leaving the two factions operating different locations.

The In-N-Out burger chain, founded in 1948 by husband and wife Rich and Esther Snyder in Baldwin Park, also has experienced public power struggles in recent years.

Steve McClure, a partner at Family Business Consulting Group who works with family businesses to solve disputes, said the conflicts can get very intense.

“Somebody going off and starting their own business, especially in a way that capitalizes on the brand of the family, is really an extreme measure,” McClure said. “Disputes in families are very emotional and a lot of it is in the history that goes on between, say, two siblings. Part of it is what happens when they were playing basketball when they were 9 and 8.”

Behind the grill

Koulax Jr. worked behind the grill with his father as a kid but became less involved with the company as he grew older.

When founder and former owner Koulax Sr. died in 1992, ownership of the company was split among the family. Today, the chief executive is Dawna Bernal, niece of Koulax Jr., and the board of directors is composed of family members. Richard Hicks, Koulax Jr.’s son-in-law, is the company’s chief financial officer, according to documents. Koulax Jr.’s two sisters, Diane and Cindy, also have ownership stakes in the company.

Since its founding in 1946 as a stand on Beverly and Rampart boulevards, the chain has grown to more than 30 locations, including two in Las Vegas. The company’s website claims it has fed 50 million at its Southern California locations.

Meanwhile, Tommy Jr.’s Chili Factory was founded in early 2008 in Marina del Rey by Koulax Jr.; his wife, Marina Koulax; and business partner Mark Kozlowski.

Kozlowski admitted the operation was still relatively small time, but said that the company sells “our fair share” and ships to as far away as New York, Boston and Russia. Plans to sell the product in a major grocery store chain in the fall are in place, he added.

“Tommy always wanted to do his own chili, so I helped get it going for him,” Kozlowski said. “They’re trying to make us sound like we’re out there trying to duplicate them, but if you read our box it says Tommy wants to share his own products with people all over. It’s his own, and it’s got nothing to do with them.”

The company features a red cursive logo on its website similar to that of Original Tommy’s, and touts that Koulax Jr. is the “son of the originator and founder of Tommy’s World Famous Hamburgers.” Original Tommy’s didn’t like that, and sent a cease-and-desist letter Christmas Eve 2008.

In response, Kozlowski and Koulax Jr. changed the name of their company from Tommy’s Original Chili Factory to Tommy Jr.’s Chili Factory, and moved from Marina del Rey to Las Vegas “so we didn’t have to be near them,” Kozlowski said. The move also cut down on shipping prices.

But the changes weren’t enough. In June 2009, Tommy Jr.’s was hit with a lawsuit in California Central District Court alleging trademark infringement and unfair competition. It seeks to bar Tommy Jr.’s Chili Factory from using “name, dress, marks and logos deceptively similar to” Original Tommy’s and asks for unspecified damages.

In response, Tommy Jr.’s asserts that Original Tommy’s can’t block the sale of “unrelated goods and merchandise in unrelated geographic forums.” In-court settlement talks were held April 14 and have been scheduled again for July.

“He had very bad cancer surgery around that time and almost died, and instead of sending him flowers they sent him a lawsuit. I couldn’t believe that,” Kozlowski said. “These people are incredible. I don’t understand it.”

Getting ugly

Koulax Jr. said the lawsuit followed on the heels of an attempt – which he said was led by daughter Darcy and her husband, Richard Hicks – to declare him insane and commit him to an institution. He said he spent hundreds of thousands of dollars on and ultimately won that legal battle.

“They’re trying to commit me for my stock. They made me take a bunch of tests,” Koulax Jr. said. “They want my ass on a platter.”

He added that he has a clean bill of mental health.

“It’s an insult to me, what they’re doing to me,” he said. “They won’t even acknowledge me. They think I’m a dead man. They won’t answer the phone. I call (Chief Executive) Dawna, and she’s the only one that answers. The rest of them, I’ve got nothing to do with.”

Koulax Jr. said he has no intentions of stopping his new chili business, despite the legal wrangling, and has worked out a new agreement with Las Vegas-based non-profit Opportunity Village to provide employment for the mentally disabled.

“I just wanted to help some people and make a few bucks for myself,” he said. “Chili’s all I’ve known.”

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