Second suit filed in Secret Sandwich Society spat

The Grace Street restaurant has been in Richmond since 2016. (Mike Platania photo)

A second lawsuit has been filed in the ongoing dispute between the founders and current operators of a popular downtown sandwich spot.

Last month, Michael and Nicole Sloane, who have been operating the Richmond location of Secret Sandwich Society since 2022, sued the restaurant’s founders, David and Tashia Bailey.

The Sloanes claim the Baileys have been trying to force them to surrender their interest in the business while also actively trying to harm the bottom line and reputation of the restaurant at 501 E. Grace St.

The Sloanes’ June 2025 court filing is a counterpunch to a case the Baileys filed last July, in which they claim that the Sloanes owe them money for a previous sale of part of the business.

Secret Sandwich Society opened in Richmond in 2016 and continues to operate as the court battles play out.

The Grace Street spot is one of two Secret Sandwich locations, the first founded by the Baileys in Fayetteville, West Virginia. While the Baileys launched the Richmond location themselves, it has in recent years operated under a licensing agreement with the Sloanes. That agreement, according to court filings, called for the Sloanes to make regular payments on a promissory note to the Baileys, along with royalties on sales at the Richmond restaurant.

Secret Sandwich seems to have found success in Richmond since arriving here nine years ago. From 2016 to 2021, sales at the Richmond location grew steadily and in 2021 the Baileys engaged the Sloanes to build on that success by opening more locations, according to the Sloanes’ lawsuit. A year later, in 2022, they allegedly worked out another deal for the Sloanes to buy a controlling interest in the LLC that controls the Richmond restaurant for around $600,000.

But the relationship eventually soured, the lawsuit states.

The Sloanes claim that the Baileys felt “seller’s remorse” after the Sloanes took control of the Richmond location, and that the Baileys allegedly began looking for and fabricating reasons to prevent them from purchasing a greater stake in the business.

Secret Sandwich Society serves burgers, sandwiches and salads, as well as craft beer. (J. Elias O’Neal)

The Baileys’ lawsuit acknowledges the 2022 deal and claims that in June 2024 they executed an acceleration clause in the deal, seeking to immediately be paid the balance on the contract of $353,000. The Baileys claim they did so because the Sloanes through their LLC allegedly owed over $50,000 in business taxes to the City of Richmond and that the location “unnecessarily maintained a high level of debt,” among other allegations.

In their respective court responses, both parties denied the allegations made against them.

The feud reached the public eye in February 2025 when the Baileys allegedly removed the Richmond location from the Secret Sandwich company website, tagged it as closed in online listings, posted to social media that it was operating without a legal license, and locked the Sloanes out of the company email.

Those actions, which the Sloanes claim were made with malice, have led  sales at the Richmond restaurant to decline nearly 30 percent in the following months, the suit alleges.

The Sloanes also claim that the Baileys had control over the bank account for the Richmond location and used that control to take “significant overpayments” of the royalty fees in an amount greater than $306,000. When confronted, the Baileys allegedly pointed to a 2019 licensing agreement that provided for significantly higher royalty rates, an agreement the Sloanes claim the Baileys failed to ever disclose previously.

The Sloanes also claim that the Baileys tried to terminate the licensing agreement for the Richmond restaurant based on a new type of hamburger bun that the Sloanes were testing at the restaurant. The suit claims that the Baileys alleged that the bun was “not approved as part of the SSS concept” and that it constituted a breach of the agreement.

The Sloanes are claiming eight counts against the Baileys, including conspiracy, breach of development agreement, fraud, unjust enrichment and defamation. They’re seeking over $500,000 in damages.

The Baileys, in their suit, allege counts of breach of contract, liability and fraud against the Sloanes, and are seeking over $353,000 in damages.

The Baileys’ July 2024 lawsuit has been working its way through the court system. A jury trial in that case is currently scheduled for November 2025. The Sloanes are similarly asking for a jury trial for their lawsuit.

The Sloanes are represented in the case by Williams Mullen’s Meredith Haynes, William Homer and Julia Rust, while the Baileys are represented by Gibson Wright of McCandlish Holton, and Richard Owen and J. David Fenwick of Goodwin & Goodwin.

Attorneys for both sides declined to comment for this story.

The post Second suit filed in Secret Sandwich Society spat appeared first on Richmond BizSense.