Illegal Pete’s has been a long-time staple in the Colorado area. Since 1995, the burrito joint has slung some of the best Tex-Mex fair and beers to date. According to the restaurant’s owner and CEO Pete Turner, restructuring the business and incorporating it as an LLC in Delaware made financial sense even if the thought of registering his Colorado as a business in Delaware bothered him.
But his dreams came to a screeching halt when Delaware courts refused to incorporate the business. It wasn’t because of health code violations, like rotting hardwood floors that need to be replaced, or a lack of employees: the real reason behind Delaware’s refusal lied in the name of Illegal Pete’s.
According to the state, its name has a negative connotation that “might cause harm to the interests of the public or the state,” according to Westword. Officials with the restaurant believe that the claim against them rose from the idea that “Illegal Pete’s” name was racially-charged. However, Turner states that he named the restaurant after his rebellious father, Pete, who liked to raise hell.
“The word ‘illegal’ in our name is a reference to the countercultural, to the rebellious, to the very picture of challenging authority that the restaurants were founded upon,” explains Illegal Pete’s officials.
This is not the first time that Turner has gotten flack for his restaurant’s name, but it is the first time legal action was sought as a result. Back in 2014, the restaurant received activist pushback against their Tempe, AZ location. Just like the 69% of businesses that start at home, Illegal Pete’s has managed to grow into a chain that’s only expected to grow. Westword also notes that many other businesses contain the term “illegal” in their names, proof that the state doesn’t ban the term from appearing in the name of a registered LLC.
This encouraged Illegal Pete’s to sue the state on the grounds that his First Amendment rights were being infringed upon.
With back-up from a recent U.S. Supreme Court Decision that allows scandalous trademarks, Illegal Pete’s was able to reach a settlement where they came out on top. As a result, the Delaware Secretary of State agreed to pay the legal fees accrued by Illegal Pete’s and even vowed to change their naming guidelines for corporations and LLCs registered in the state.
Turner feels vindicated by the final decision.
“[…] Our name has been unwittingly rolled into a larger conversation about race, the United States, who belongs here and if a human being should ever be referred to as ‘illegal,'” the restaurant reported in a press release regarding the win. “We believe that no person should be referred to as ‘illegal’ because of where they come from…we believe this is a vital conversation, and we’ll participate in the dialogue as immigrants, allies and friends of immigrants; we just maintain that our name has nothing to do with this fight.”
The business is expected to finalize its registration as a Colorado corporation by the end of this year, marking a significant milestone for the business as it reaches its 25th anniversary.