Jujamcyn Theaters’ relationship with Sweet Hospitality Group has soured.
Following several months of heated negotiations, the concessions company is now begging a New York court to step in and stop the Broadway theater owner from bringing down the curtain on their longstanding agreement to serve cocktails and candy at its theaters. “Terminating our concessions at the five Jujamcyn theatres, where we have approximately 45 staff members serving, prematurely and without sufficient lead time, will materially impair and potentially destroy [Sweet Hospitality Group]’s business,” insists its founder, Julie Rose.
The companies first entered into an agreement in 2015. Jujamcyn Theaters agreed to let Sweet Hospitality Group set up bars and concession stands in its theaters, and Sweet Hospitality Group agreed to pay Jujamcyn Theaters 47.5 percent of the revenues generated from the bars and concession stands after deducting taxes and credit card fees.
In exchange for extending the agreement through 2025, Sweet Hospitality Group also agreed to pay $250,000 to upgrade the bars at the theaters. “This investment was made to secure exclusive concession rights for the extended term and ensure both parties were committed to providing premiere level concessions at the Theatres for the agreed period,” stated Rose, estimating that about 60 percent of the concessions company’s total revenues were tied to its relationship with the theater chain.
But, earlier in the year, it was announced that the British theater company Ambassador Theatre Group and Jujamcyn Theaters would “combine operations.”
Jujamcyn Theaters sold a 93 percent stake in the five theaters to Ambassador Theatre Group in June, and the purchaser sent a letter to break up with Sweet Hospitality Group one month later. Ambassador Theatre Group provides concession services at its other Broadway theaters, and it is planning to offer “a half bottle of Moët & Chandon, 3-course light meal and intermission sweet treat” to certain theatergoers during the upcoming production of Cabaret at the August Wilson Theatre.
The agreement sets forth that, “[i]n the event that [Jujamcyn Theaters] at any time during the term of this Agreement shall cease to own and/or operate any one or more of the [t]heatres, this Agreement, insofar as it relates to the particular theatre or theatres, shall not be operative.”
“We believe that the transition of operating control of the Jujamcyn theatres to ATG falls within this language,” wrote Stephen Lewin, the chief executive officer of Ambassador Theatre Group. “Indeed, the language of the agreement appears to contemplate this very situation,” he continued.
Rose and the attorneys for Sweet Hospitality Group disagreed.
“While you have advised that Jujamcyn has ‘combined operations’ with ATG, this is of course not the same as Jujamcyn ceasing to ‘own and/or operate’ the [t]heatres,” wrote attorneys for the concessions company. “Based on your own description, this appears, if anything, a ‘change of control’ of Jujamycn,” argued the attorneys.
“The assertion that Jujamcyn no longer owned or controlled the [t]heatres is at odds with reality,” echoed Rose. Jujamcyn Theaters is still identified as the owner of the five theaters on its website, Sweet Hospitality Group still pays money to Jujamcyn Theaters, and Jujamcyn Theaters is still listed on the liquor licenses renewed for the theaters last month.
Executives at Jujamcyn Theaters declined to discuss the lawsuit, and the theater company now has several weeks to respond to complaint.