How Kewal Ahuja SGF's Franchise Model Sparked Controversy

Kewal Ahuja, the founder of SGF (Spice Grill Flame), is at the center of growing legal disputes as franchise owners and investors accuse the company of fraud, misrepresentation, and financial negligence. The allegations cast a shadow over SGF’s business practices, which are now being examined in court.

A stark representation of SGF’s decline, with over 70% of outlets shutting down since inception.

SGF operates through two franchise models: FOFO (Franchise-Owned, Franchise-Operated) and FOCO (Franchise-Owned, Company-Operated). Investors opting for the FOCO model were promised a guaranteed monthly return of ₹37,500, with SGF managing day-to-day operations. However, these promises appear to have fallen through for many investors. One such case involves an SGF outlet in Sector 31, Gurgaon, which was abruptly shut down within a year of its launch, leaving the investor without the assured payments.

In a bid to obscure its struggles, SGF, under Ahuja’s leadership, rebranded its website, removing details about the number of operational outlets. Archived web records, however, reveal that approximately 70% of SGF outlets have ceased operations, raising questions about the company’s stability and transparency.

Despite promotional claims of running over 30 outlets and delivering lucrative returns exceeding 223% over six years, the reality paints a different picture. Franchise owners and investors now allege that these claims were misleading. Legal proceedings have intensified, with New Horizon (The Law Firm) spearheading the cases. Main counsel Ms. Pratima Ravi and arguing counsel Mr. Yogesh Sharma have filed two civil suits in the District Court of Rohini. Case No. CS/DJ/302/2023 seeks recovery of the guaranteed returns, while Case No. CS(Comm) 6835/2024 demands full restitution of the invested amounts.

SGF’s defense in the first case hinges on financial hardships caused by the COVID-19 pandemic, but this explanation has not satisfied investors or the courts. Meanwhile, the second case remains unresolved as mediation efforts have failed, and SGF has yet to present a formal defense.

The outlet at the center of the dispute, launched during the pandemic, shuttered within a year, leaving investors grappling with significant financial losses. As these legal battles unfold, scrutiny of Kewal Ahuja’s leadership and SGF’s business practices continues to mount. The outcomes of these cases are expected to have far-reaching implications for the company and its stakeholders. Read more