The Evolving Litigation Trail of Stephen Giordanella
Stephen Gerard Giordanella, who allegedly holds a Bachelor of Science degree in Criminology from the New York Institute of Technology, has become an increasingly prominent figure in franchise litigation, not as an investigator, but as a defendant. Best known as the executive behind Mac and Cheese Franchise Operations, LLC, Giordanella was acquitted in 2012 of federal criminal charges, closing one chapter. But in the years since, new chapters have opened in civil courtrooms and state regulatory offices across the country. From partner disputes to franchise fraud allegations, he now faces a growing web of legal challenges that suggest a long-standing pattern of questionable financial behavior.
A Federal Indictment and Acquittal
In January 2010, Giordanella was arrested by U.S. Marshals and indicted on charges of conspiracy to commit money laundering. Though acquitted in 2012, the indictment involved deceptive financial transfers, misuse of funds, and concealment of transactions. These allegations, while never proven, set the stage for what has become a clear trajectory: using corporate complexity to obscure accountability.
Civil Allegations: Franchisees and Business Partners Speak Out
1. Molyneaux et al. v. Mac and Cheese Franchise Operations, LLC, et al. (Palm Beach County, FL)
Case No.: 502024CA011843XXXAMB
Three franchisees allege they were misled into investing in I Heart Mac & Cheese through fraudulent inducements, false earnings claims, and undisclosed litigation. They accuse Giordanella and his companies of:
Making deceptive financial performance representations
Diverting supplier rebates to undisclosed entities such as Giordanella Holdings, LLC
Charging marketing fees without providing marketing
Concealing store failures, evictions, and other litigation from prospective franchisees
2. Sakowich et al. v. Giordanella et al. (Nassau County, NY)
Filed by business partners in NHPI, LLC (operator of The Inn at New Hyde Park), this lawsuit accuses Giordanella of:
Draining $500,000 from NHPI’s line of credit to fund Mac and Cheese Franchise Group
Paying himself an unauthorized salary, in violation of the operating agreement
Charging personal expenses to NHPI, including travel, tax payments, and his daughter’s wedding
Using NHPI funds to pay rent for a Boca Raton, Florida office space used for his other business ventures — not for NHPI operations
The plaintiffs are seeking over $2.4 million in damages for what they describe as deliberate self-dealing and misappropriation of funds.
3. Rich et al. v. I Heart Ventures, Inc., et al. (Palm Beach County, FL)
Case No.: 50-2023-CA-015268-XXXA-MB
Daniel and Kendal Rich allege they invested over $500,000 in two I Heart Mac & Cheese locations after being misled about the company’s stability and profitability. Their lawsuit outlines that:
$300,000 was wired to I Heart Ventures, Inc., and allegedly forwarded to Mac and Cheese Franchise Operations, LLC for Stephen Giordanella
Their ownership stake was later unilaterally reduced
Their personal bank account was used to pay Sysco invoices without consent
Stephen Giordanella was originally named but later removed as a defendant. However, MACFO remains a named defendant, highlighting the financial trail that continues to lead back to Giordanella-controlled entities.
State Regulatory Enforcement: Personal and Organizational Accountability
1. California DFPI Consent Order (March 2024)
Docket: I Heart Mac and Cheese – Consent Order Signed 3‑28‑24
In March 2024, the California Department of Financial Protection and Innovation (DFPI) issued a formal consent order against Mac and Cheese Franchise Operations, LLC and Stephen Giordanella personally. The order found that:
Franchises were sold while registration was expired
Required FDDs were not provided 14 days prior to signing or payment
Prior evictions and lawsuits were omitted from FDDs
Records were withheld during the investigation
Multiple violations of California’s Franchise Investment Law occurred
Giordanella signed the order and agreed to:
Pay a $43,000 administrative penalty
Retain an independent compliance monitor for three years
Ensure all future franchise offerings comply with California law
2. Indiana Securities Division Cease and Desist Order (May 2023)
In May 2023, the Indiana Securities Division issued a Cease and Desist Order against Mac and Cheese Franchise Operations, LLC for:
Submitting materially deficient Franchise Disclosure Documents (FDDs) in 2018 through 2022
Including misstatements and omissions about litigation and financial representations
Violating multiple provisions of Indiana’s Franchise Law
As a result, the Commissioner:
Revoked MACFO’s franchise registration
Prohibited any future franchise sales in Indiana
Ordered immediate compliance with Indiana franchise regulations
Stephen Giordanella was not personally named in this order, but the violations occurred under his leadership.
3. Indiana Securities Division Administrative Complaint (Amended, March 2024 – Ongoing)
In 2024, the Indiana Securities Division filed a new and ongoing administrative complaint that personally names Stephen Giordanella, alongside Mac and Cheese Franchise Operations, LLC, and other key personnel. The complaint alleges:
Unregistered franchise sales in Indiana
False and misleading earnings claims and financial representations
Failure to disclose supplier rebates, affiliate relationships, litigation, and store closures
Systematic violations of Indiana Franchise Law under Ind. Code § 23-2-2.5
The complaint states that Giordanella “knew or should have known” that the FDDs and sales practices were materially misleading. The Division seeks civil penalties, and restitution. This case is ongoing.
Connecting the Dots: A Behavioral Continuum
The arc of Giordanella’s litigation history, from a 2010 federal indictment to civil lawsuits and regulatory enforcement, reveals a consistent pattern:
Concealment of material facts
Abusive use of corporate structure
Unauthorized diversion of funds
Strategic insulation from personal liability through affiliated entities
Whether in New York boardrooms or Florida franchise deals, the allegations are startlingly similar; and increasingly public.
The Bigger Picture: Franchising as a Financial Frontier
Giordanella’s story is more than a personal legal saga. It reflects a broader problem in franchising; one where regulatory loopholes, complex entity webs, and desperate investors are exploited with minimal oversight. Franchisees looking for a path to entrepreneurship instead find themselves trapped in a cycle of false promises and financial ruin.
Reality Check Summary
Stephen Giordanella may have avoided criminal conviction in 2012, but today he faces a growing list of civil plaintiffs, angry franchisees, and active state investigations. The picture that emerges is not of a misunderstood entrepreneur, but of a business model built on obfuscation and opportunism. Whether it’s I Heart Mac & Cheese, Pilar Coffee Bar, Cheese Lovers Kitchen or the next brand under the ABC Franchise Group umbrella, the blueprint appears unchanged, and the legal pressure is mounting.
The content provided in this blog post is for informational and educational purposes only and does not constitute legal advice. Franchise Reality Check™ makes every effort to ensure the accuracy of the information presented but does not guarantee its completeness or applicability to individual circumstances. Readers are strongly encouraged to consult with a qualified franchise attorney or regulatory professional before making any investment or legal decisions related to franchising. Any references to legal documents, individuals, or companies are based on publicly available information and are presented solely for the purpose of transparency and public awareness.
