Waffle house leaving over neighbouring shop's exclusivity clause

An Ottawa waffle maker says he has to leave the space where he launched his business because of a dispute he's not to blame for. 

James Choi opened Sharpfle Waffle in December 2021. It offers Korean-style croissant-based waffles paired with caffeinated and non-caffeinated drinks in a Hintonburg mixed-use building home to several other businesses.

Those include Stella Luna Gelato Café, which has rented a unit on another corner of the building since 2016.

Stella Luna has taken Sharpfle Waffle and the building's head landlord Tamarack to court, claiming Sharpfle Waffle's dine-in food and café drinks breaches the terms of Stella Luna's lease.

"The lease clearly provides Stella Luna with exclusivity in respect to operating a restaurant [in the building]," according to a statement of claim Stella Luna filed in Ontario Superior Court just over a year ago.

Without an injunction calling on Sharpfle Waffle to adjust its offerings, Stella Luna would go out of business, the document went on to state. 

A first-time business owner, Choi said it was wrong for Stella Luna to name him in the case because Tamarack approved his operations before signing his lease.

He said Tamarack has now required him to cut his specialty coffees — drip coffee and steeped or brewed tea is fine — and stick to take-out. Choi said that leaves him no choice but to leave when his lease expires at the end of the month.

He hopes he can find a nearby location. 

"We were growing," Choi said of his business. "But at the same time this legal proceeding did give us a tremendous amount of stress on what we can do."

Stella Luna never reached out to him before the court action with concerns about his indoor seating, which only has room for eight people, he added. 

"It's not a very friendly approach," Choi said of Stella Luna. "I shouldn't be the one to be blamed for their financial loss. They can direct it to the landlord."

'We sympathize,' Stella Luna says 

Tamarack did not respond to requests for comment on Monday afternoon.

In a statement released in an Instagram story on Monday, Stella Luna said it bears no ill will to Sharpfle Waffle.

"We sympathize with its predicament," the company said.

But Stella Luna pays a premium for its exclusivity rights, according to the court application, and it was surprised when Sharpfle Waffle moved in a few doors down, according to its statement. 

"Stella Luna was never consulted or provided notice by our landlord that another 'restaurant or cafe-like business' had been allowed to rent a unit in the plaza," the statement read.

"Our issues are solely with our landlord."

Stella Luna included Sharpfle Waffle in the case because it would allow it "the opportunity to make submissions with regard to the situation as its right would be directly impacted."

"Unfortunately we are limited to discuss ongoing proceedings beyond this," Stella Luna co-owner Zachary Giuliani said via email when asked for an interview. 

'Green light on the Korean waffles' 

Choi has never offered ice cream at Sharpfle Waffle, he said.

Whether he intended to appeared to be a source of concern at Taggart, Tamarack's parent company, before Choi opened his business, according to email correspondence Choi shared with CBC.

On Sept. 3, 2021, however, a Taggart rep confirmed: "We got the green light on the Korean waffles."

Choi opened his business in December 2021 and was served Stella Luna's notice of application in April 2022.

A January 2023 email, which Choi also provided to CBC, outlined the landlord's conditions for Choi to remain in the plaza under a lease extension.

Section 12, which originally said nothing about ice cream, gelato or Stella Luna (according to a copy of the initial lease provided by Choi), would be significantly expanded in the revised lease, stipulating the space could only be used "for the operation of a take-out Korea-style waffle business."

"The authorized business shall not include the offering, sale or provision of specialty-tea (including without limitation chai), or specialty-coffee (including without limitation espresso, cappuccino, latte)," the condition went on.

No ice cream or gelato either, the company again stressed. 

Choi said the whole experience has left him feeling like he's "being presented on the stage" by two parties he thinks should be duking it out by themselves. 

"As a person in between, I'm the one that's primarily impacted by this," he said. 

Still, the support he's received by saddened customers disappointed to learn of his impending departure has been heartening, Choi said. 

"It's giving me a lot of courage to focus on what I did here and to find a new location to really bring what I can do to the fullest potential."

Read Stella Luna's full application to Ontario Superior Court here.