Earls founders take control of Cactus Club Cafe chain

The bitter legal feud between the founders of the Earls and Cactus Club Cafe restaurant chains appears to be over.

The Fuller family, a long-time investor in the company, announced Wednesday that it has acquired full ownership interest in Cactus Club from founder and president Richard Jaffray.

The Fullers, led by patriarch Leroy Earl "Bus" Fuller, founded the Earls and Joey restaurant chains and has been a silent investor in Cactus Club since its inception in the late 1980s.

Jaffray and partner Scott Morison — both former Earls employees — opened the first Cactus Club Cafe in North Vancouver, B.C., in 1988. There are now 32 locations across Canada, employing 5,000 people.

For decades, Earls and Cactus Club occupied the same "premium casual dining" market harmoniously, but lawsuits filed in B.C. Supreme Court in recent years revealed a bitter feud between the Fullers and Jaffray.

Allegations over share transfers, misused funds

The first outward sign of trouble came in 2018, when Jaffray filed a suit in B.C. Supreme Court against various Earls subsidiaries and members of the Fuller family.

His claim alleged a complicated transfer of Cactus Club shares between members of the Fuller family had been done without giving him proper notice.

The Fullers denied breaking any agreement with Jaffray and said there was no transfer of shares.

Court documents also included allegations that Jaffray misused Cactus Club funds to pay for private jets and art for his home. There were also claims that the Fullers had used the chain's confidential financial information to give an unfair edge to Joey Restaurants.

The relationship became so acrimonious that the Fullers filed a counterclaim calling for the company that ran Cactus Club to be completely dissolved.

But there was no hint of animosity in the release issued by the Fuller family on Wednesday.

"We have enormous respect for what Richard has built," said Stan Fuller, who started Earls with his father Leroy in 1982. "Our commitment is to preserve and build on the work [he] has done to build the Cactus Club brand into such a success."

Jaffray was quoted in the release saying he is incredibly proud of the team that built the chain up to what is today.

"There is no finer team to be found anywhere, and I know they will carry the Cactus Club brand on to continued success in the future," said Jaffray, who is stepping down as president as the Fullers take full ownership.

Cactus Club and Earls expected to compete

Ian Tostenson, president of the B.C. Restaurant and Foodservices Association, says he expects diners at the popular restaurant chains may not notice much of a difference as both Cactus Club and Earls will continue to compete in the same market category. 

"The family has shown that their restaurant concepts, they do segregate them and each of those brands will create their own culture, and that's very important," he said. 

He said the acquisition is not necessarily bad news for smaller restaurants, which can still find success by specializing in specific cuisines. 

"It's very difficult for chains to do that," he said. "They run on a formula. They can't get too specialized in some of the things they do because they do it in such a grand fashion."

Vancouver food writer Tim Pawsey said it would be "crazy" to mess with either brand, so he expects they'll remain distinct. 

"I suspect there will be some tweaks but it will be very much the same."