Cup of Tea Flushing, LLC, and associated plaintiffs have filed a lawsuit against HK Heycha Limited, alleging fraudulent business practices and seeking significant damages.
The plaintiffs accuse HK Heycha Limited of engaging in deceptive conduct in violation of various laws, including the New York Franchise Sales Act. According to the complaint, the defendants misrepresented their registration status in New York and attempted to impose arbitration under Chinese law. One of the plaintiffs, Mr. Lee, claims to have invested over three million dollars based on these alleged misrepresentations. The plaintiffs further allege that HK Heycha Limited acted in bad faith by obstructing the operation of several franchise locations.
The complaint states that HK Heycha Limited provided Mr. Lee with an outdated Uniform Franchise Offering Circular (UFOC) rather than a legally required Franchise Disclosure Document (FDD). The plaintiffs allege this was intended to create the appearance of compliance with franchise laws. They also argue that contract clauses requiring arbitration in China under Chinese law are void under New York law, as they effectively waive rights protected by state franchise regulations.
The plaintiffs seek rescission of the contracts, compensatory damages in excess of three million dollars, punitive damages, and injunctive relief to prevent further harm. The claims include fraudulent inducement and violations of the New York Franchise Sales Act.
The plaintiffs are represented by attorneys Daniel D. Kim of the Law Offices of Daniel D. Kim and Dan Schiavetta Jr. of Murphy Higgins & Schiavetta PLLC. The case was filed in the United States District Court for the Eastern District of New York under Case ID 1:25-cv-03567.