Less than a year after opening, a Haraz Coffee House near Syracuse University in New York has closed as the local operators face a lawsuit filed by the coffee chain’s franchising company.

Michigan-based Haraz Coffee House Franchising LLC filed the lawsuit Sept. 25 in New York State Supreme Court in Onondaga County, alleging numerous violations of a franchise agreement involving the cafe at 125 Marshall St. The defendants are Coffee Bean Syracuse LLC and individuals Mohammed Alsaidi and Emad Alzokari.

The complaint alleges that the franchisee purchased coffee, tea, milk, syrups, packaging and other products from suppliers not approved by Haraz, despite contractual purchasing requirements. Haraz also alleges the operators failed to pay outstanding product invoices and royalties, and removed the franchisor’s access to the store’s Toast point-of-sale account, limiting its ability to monitor sales.

Haraz founder and CEO Hamzah Nasser said in a sworn court statement that the company identified 39 product lines obtained from unauthorized suppliers.

The franchise agreement signed in June 2024 and filed with the court specifies a $50,000 initial franchise fee, a royalty of 4% of weekly gross sales and a 1% advertising fund contribution. The agreement requires the operator to purchase coffee and other products from Haraz or its designated suppliers, which may include Haraz-affiliated companies.

Haraz said it notified the Syracuse operators of the alleged violations in April and terminated the franchise agreement July 30 after the issues remained unresolved.

Daily Coffee News has reached out to an attorney representing the defendants for comment.

The lawsuit seeks to enforce numerous post-termination provisions of the franchise agreement, including removing Haraz branding, returning proprietary business materials and cooperating with a potential transfer of the cafe’s lease to Haraz. The company is also seeking to enforce a two-year provision restricting the former operators from running a competing coffee business within five miles of the location.

Founded by Nasser in Dearborn, Michigan, in 2021, Haraz is among several Yemeni coffeehouse chains expanding in the United States. The company’s homepage currently claims more than 60 existing locations and more than 240 locations to be developed, without specifying how many are franchises.

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