Former Twin Peaks Operator Levels Fraud Allegations at Business Partners

The former chief operating officer of several high-volume Twin Peaks restaurants is suing his business partners, alleging corruption and fraud is what forced two of the company’s restaurants into bankruptcy.

Jason Austin Hester, who from November 2014 until his termination December 29 was the COO of Davie, Florida-based Double Mountain Development Ventures (DMD), said in an interview he believes co-CEOs Jack Flechner and Fred Burgess misused company funds and misappropriated restaurant cash flows instead of paying back investors.

“My contention is money is going somewhere, and it seems to be that their position is they’re just going to pay no one and enrich themselves,” said Hester. “They obviously live a lifestyle that isn’t paid by the small salaries we were taking.”

In a lawsuit filed January 7 in a Florida’s Broward County Circuit Court, Hester alleged Flechner and Burgess “engaged in grossly negligent and/or intentional conduct by initiating unauthorized expenditures and transactions,” and that Flechner and Burgess both “engaged in acts of corporate waste by misappropriating and squandering company funds for [their] personal benefit, including, but not limited to, chartering private jets and purchasing luxury gifts exceeding $5,000” with no approval as required in the operating agreement.

Flechner and Burgess have denied the allegations, with Burgess in a statement calling Hester’s claims “categorically false.” They filed a motion January 21 to dismiss the lawsuit, and have accused Hester of stealing hundreds of thousands of dollars from the company’s marketing fund.

“We have never used company funds for personal luxuries such as chartering private jets or extravagant gifts. At one time, DMD owned a fractional share of a private plane which was primarily used for DMD business, as we had commitments to build over 45 franchise restaurants throughout Florida and the Southeast United States,” said Burgess. “What is ironic is that Mr. Hester was an owner of this plane along with us.”

All three remain partners in the company; Flechner and Burgess hold stakes of 37.9 percent, while Hester’s stake is 10 percent.

DMD Ventures has eight Twin Peaks restaurants in the southern part of Florida. The company filed for Chapter 11 bankruptcy protection January 6 for two of its affiliates, DMD Florida Development 2 and DMD Florida Restaurant Groups C and D, which operate two Twin Peaks units.

The bankruptcy filings came after one of DMD’s largest creditors, Florida Restaurant Franchise Group, sued DMD in May 2024 in Collier County Court alleging breach of a promissory note and default of payment.

Florida Restaurant Franchise Group, according to its lawsuit, said DMD failed to repay investment funds made available through the EB-5 Immigrant Investor Program, which enables foreign investors to earn permanent residence in the United States by investing $500,000 in U.S. projects that create a required number of jobs.

Hester, who before joining DMD Ventures was the director of operations for Twin Peaks, said the restaurants involved in the bankruptcy were two of the top-performers in the system, doing “more than double” the $5.1 million average unit volume of a Twin Peaks. There’s no financial performance reason, he said, for those restaurants to go into bankruptcy. Instead, he contended the bankruptcies are an attempt to hide the corruption on the part of Flechner and Burgess.

In his statement, Burgess said the Chapter 11 filings were primarily due to financial challenges that stemmed from an inability to refinance that EB-5 loan.

“Our inability to refinance this debt to repay these investors was compounded by increased food and labor costs that have affected the broader restaurant industry since the COVID-19 pandemic, causing the vast majority of lenders to pause all lending to the restaurant industry,” said Burgess. He noted the bankruptcy protection “would allow us the breathing room to get on track with repaying our investors.”

A partner dispute escalates

Flechner and Burgess, both attorneys, co-founded DMD in 2012 as a commercial development and hospitality company. It’s also a Papa Johns and Go Mini’s Moving and Portable Storage franchisee, and operates a Candlewood Suites extended-stay hotel.

Hester in an interview said it was late 2023 when he began to suspect something was amiss with the company’s financials. The narrative at the time was that money was tight as DMD worked to open two more Twin Peaks, in Doral and Naples, Florida. Those locations opened in March and April 2024, respectively, with both “coming out of the gate strong,” Hester said.

“But it still was kind of being portrayed that the company wasn’t doing well and we couldn’t pay our bills,” he said. “Nothing lined up.”

On December 2, according to court filings, Hester in an email to Flechner and Burgess demanded access to DMD’s financial records on his work computer. Flechner responded that Hester has “had access to these records for years” from the office and that allowing him to view them at home would require an unnecessary software update.

In a lawsuit filed two weeks later, Hester sought to force his partners to provide the access he requested.

On December 29, DMD fired Hester. In that termination letter, DMD alleged Hester stole from the company’s marketing fund and received unauthorized perks from vendors.

Hester’s amended January lawsuit called the theft accusations “baseless,” and he alleged his firing was in retaliation for asking to see DMD’s financial records.

DMD in its motion to dismiss the lawsuit called Hester’s complaint a “wholesale, barely intelligible, kitchen-sink pleading.” Hester’s accusations weren’t supported with facts, such as the amount of money in question, according to the motion.

“If there was ever a complaint that is the definition of ‘let’s throw everything at the wall and see what sticks,’ this is the complaint,” the motion reads.

Burgess in his statement to Franchise Times said the reason for Hester’s termination “was his misappropriation of hundreds of thousands of dollars from a marketing fund.”

“In October 2024, we uncovered that Austin had been misusing these marketing funds for over four years,” said Burgess, with unauthorized expenditures including personal trips to Europe and Mexico, attending the Super Bowl and Formula 1 races and purchasing Taylor Swift concert tickets. “Upon confronting Austin with these findings, alongside Jack, me, and our director of finance, he admitted to his misconduct and failed to provide any valid justification for his actions. His recent claims accusing us of misusing company funds for luxury items are not only false but also a desperate attempt to divert attention from his own wrongdoing.”

Twin Peaks, a 115-unit sports bar franchise, went public January 30 in a spinoff from parent company FAT Brands. The company declined to comment for this story because the situation is an “internal employment matter with DMD Ventures and their employee.”

A hearing on the motion to dismiss is set for March 12.

Of the bankruptcies, Burgess said there’s been significant progress toward an agreement with Florida Restaurant Franchise Group.

“We are optimistic that the matter will be resolved in the coming months, allowing us to continue delivering an outstanding Twin Peaks experience to our valued guests for many years to come,” Burgess said.

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