“Black Rifle Coffee” Sued for Allegedly Not Paying Royalties, Monthly Fees

Black Rifle Coffee Company logo. Businesswire press photograph.

An Ohio-based beverage consulting and a once friendly relationship Black Rifle Coffee Company (BRCC) seems to be in decline, with the former suggesting that the latter has not met a “multi-million-dollar financial obligation.”

Lawyers representing the Dayton-based, Michigan-registered RTD”ready to drink”Strategy and Execution, Inc., a beverage consulting company, filed a lawsuit at Western Texas U.S. District Court in the beginning of this month.

DCN obtained court documents from the plaintiffs claiming that BRCC failed to pay millions of dollars in royalties and fees as required by a four year consulting agreement, which took effect January 1, 2020.

Black Rifle Coffee Company didn’t immediately respond to DCN’s request for comment.

According to the lawsuit, SEI executives and veterans in the packaged beverage industry, Bryon Evans, Pete Popovich, were key in bringing Black Rifle RTD Products to market in 2020. They did this by using existing industry relationships and engaging certain co-packers including New York-based ones. O-AT-KA Milk Products And Dairy Farmers of America (DFA).

The suit describes O-AT-KA (and DFA) as “the largest manufacturers of RTD coffee beverages in the United States.”

Since then, BRCC Publicized through the New York Stock Exchange Direct-to-consumer, retail distribution, franchise-based, and company-owned retail expansion has all contributed to the exponential growth of this brand. In its Q3 2022 investor report, the veteran-owned and pro-gun company stated that RTD coffee was its fastest-growing trade channel, despite RTD. “production issue” This will result in a reduction of quarterly profits.

DCN file photo. Not affiliated with SEI/BRCC.

SEI alleges in the lawsuit that BRCC has failed deliver certain monthly fees, royalties, and costs as outlined by the original consulting contract. These include costs for additional sales agents, and a 2-cents unit royalty on products.

“In simple terms, Plaintiff has become a victim of its own success,” The complaint summary was written by SEI’s lawyers. “Once Plaintiff’s royalties, for example, became a multi-million-dollar financial obligation for Defendant, Defendant began taking steps to distance itself from Plaintiff and its financial obligations under the parties’ Consulting Agreement.”

SEI is also seeking past and future royalties for O-AT-KA’s RTD beverages. However, SEI is also seeking per-unit royalties from BRCC for RTD drinks made with other manufacturers like Trilliant and Bev-Hub.

After apparently successful beginnings, the suit shows a more chilly relationship between SEI & BRCC. A story published in BRCC’s April 2020 magazine, called “Coffee or Die”The coffee company cited Evans as an Evans direct quote and noted SEI’s contribution to the launch of RTD.

“When we initially met the [BRCC] team, we were so incredibly impressed with their genuine nature,” Evans stated in The story. “They are not only motivated to provide great quality coffee — which is obviously critically important to the mission — but also laser-focused on supporting the veteran community and first responders.”

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