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Barrio owners sue former business partner who plans to open similar taco restaurant in Cleveland area

September 13, 2018

Barrio owners sue former business partner who plans to open similar taco restaurant in Cleveland area

CLEVELAND, Ohio — The owners of Barrio, the trendy Cleveland-area make-your-own-taco restaurant, are suing a former business partner who started up a group of similar restaurants with plans to open a location in the eastern suburbs.

The lawsuit, filed in U.S. District Court in Cleveland last week, alleges that Joe Kahn and others behind Condado Tacos stole trade secrets and violated an agreement Kahn entered into when he left the business partnership that created Barrio.

(You can read the lawsuit, the separation agreement and a statement from Kahn at the bottom of this story.)

The suit is the latest sign of bad blood between Kahn and Barrio principals Tom Leneghan and Sean Fairbairn, which has spilled into court at least once before. Kahn filed a breach of fiduciary lawsuit in Cuyahgoa County in 2013 against Leneghan, a longtime developer in Cleveland who also owns the Treehouse bar in Tremont and PJ McIntyre’s in West Park.

That suit ended in a settlement agreement the following year, in which Kahn left the partnership behind Barrio and agreed to certain terms. Kahn agreed to not do business under the name Barrio, to not use “any logo, trade mark or service mark associated” with Barrio, which included the phrase “in the heart of.” Kahn could also not open a Mexican restaurant within a two-mile radius of Barrio’s locations for two years.

While Kahn opened the first Condado in 2014 in Columbus, the latest lawsuit comes as he plans to open a new location in the Pinecrest development in Orange Village. Kahn’s attorney said the plan is to open the new location some time in November.

Barrio’s lawsuit says Condado Tacos — which also has locations in Pittsburgh, Cincinnati and Indianapolis — copped the entire look and feel of Barrio, which has five locations in the Cleveland area and one in New Hampshire.

This includes the restaurant’s “Day of the Dead”-inspired theme and decorations and the make-your-own tacos checklist that patrons fill out and give to wait staff. Even the presentation of the tacos wrapped in foil and served in plastic baskets are identical, according to the suit.

“The minute a patron walks into a Condado, the patron is immersed in an atmosphere and embarking on a dining experience that has the look and feel of Barrio,” the lawsuit says.

Barrio claims this has created confusion with patrons who think the restaurants are affiliated with each other, which is exacerbated by Kahn often noting that he co-founded Barrio.

The lawsuit also says Kahn has used the phrase “in the heart of” in news releases announcing the openings of the Columbus and Pittsburgh locations.

“Defendants capitalized on the hard work of Barrio’s established methods to quickly flood the market and seize control,” the lawsuit says.

Barrio is seeking a judge’s order to prevent Kahn and others from opening any other Condado’s or restaurants similar to Barrio. It also wants Condado to strip its restaurants from decorations and materials that are similar to Barrio’s.

The suit also seeks an unnamed amount in damages.

Kahn, in a statement provided by his attorney Brad Barmen on Thursday, said the lawsuit was frivolous.

“As far back as 2014, I’m quoted in media stories saying I was bringing my concept to Columbus with the first Condado in hopes of nationwide expansion,” Kahn said. “Curiously, this has never been an issue until we announced our first Cleveland location would open at Pinecrest in Orange this winter.”

The Orange Village location is not specifically mentioned in the suit.

Barmen said in a separate interview that the lawsuit was “generated out of spite.”

Scott Orille, a lawyer representing Barrio, declined comment.

The lawsuit says Leneghan developed the concept for the restaurant that eventually became Barrio. Kahn sees it differently, writing in a 2014 court filing that he developed the concept “over a lifetime of work in the bar and restaurant industry.”

The case is assigned to U.S. District Judge Christopher Boyko.

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