Pink Sauce X Dave's Gourmet Partnership Timeline
In August 2022, Dave's Gourmet LLC ("DG") signed an agreement ("Agreement") with Veronica Shaw (“Shaw”) and her entities, Pink Sauce LLC (“PS LLC”) and Flavor Crazy Inc, (“FC”) in which FC/PS LLC/Shaw were responsible for promoting Pink Sauce (“PS”) through the digital content (requirement to post about PS on social media at least three times a week) and DG was in charge of achieving the required shelf stability for the product, making the formula acceptable for commercial production and following FDA’s food production guidelines, production, and sales of the PS product online and to retailers.
At the time, Shaw was not producing PS because FDA instructed her to cease all the production due to quality concerns (she was making PS in her kitchen and was shipping it without refrigeration in the heat of the summer and the sauce frequently went bad during shipping as evidenced by many social media posts from buyers). The sauce was not shelf stable and was not safe for shipping without refrigeration. There was huge negative publicity online and on social media due to the quality issues that Shaw had experienced. According to the agreement, Shaw received an upfront payment of $45,000 as a part of the Agreement for DG to pursue the sales of PS.
According to the Agreement, Shaw was responsible for all the refunds for the products that predated the Agreement. After the Agreement was signed, we learned that neither Shaw nor her entities had enough funds to cover all the refunds to the people who never received the products that she was responsible for according to the Agreement. There was a hold put by Shopify and PayPal on most of the cash in Shaw's accounts due to multiple customer complaints and even the cash that was there was mostly not available to pay refunds. DG couldn't see the customers disappointed with no product and no refund, so it provided approximately $30,000 to cover the refunds (even though this was Shaw's responsibility). Some of these funds came back to DG later in the year after the hold on the Shaw's account was lifted by PayPal and Shopify.
Prior to entering the partnership with DG, Shaw reviewed and negotiated the Agreement with the help from her attorney. According to the Agreement, Shaw receives royalties that depend on the Gross Profit that the Company makes on the sales of PS and there is a milestone payment if certain goals are met. The royalty payments are based on Gross Profit because at the time we did not know what the PS product would cost given that it contains expensive ingredients like dragon fruit that needed to be factored in.
When we negotiated this Agreement, we walked Shaw and her attorney through the difference between Sales and Gross Profit to make sure that everyone is on the same page. All payments have been communicated and paid on time in accordance with the Agreement. DG also advised Shaw that PS royalties should not be her only source of income as they can fluctuate, and she should have a regular job to make sure that she has financial stability. At the time DG did not know if any sales would be generated from PS.
In the fall of 2022 Shaw was struggling financially. DG decided to be helpful and over the course of several months provided Shaw with multiple cash advances that total more than $40,000 without charging Shaw interest or fees. These advances were supposed to be offset by the future royalties that Shaw was going to earn.
In March 2023, Shaw communicated that she had spent the entirety of her previous advances and that she needed another advance to feed her children and avoid being evicted. DG sent her two advances that total $5,000, but again encouraged her to continue working her other job and pursue her private chef career as she had been doing prior to partnering to commercially produce Pink Sauce.
Shaw wanted to know more about activities related to PS at DG. In the beginning of 2023, the DG team set up a weekly standing meeting to discuss the brand strategy and collaborate with Shaw. Shaw attended only a couple of these meetings and has not been in attendance since.
February 2023, Shaw requested over $10,000 in marketing expenses to throw herself a birthday party, and also asked DG to pay for her dress that cost more than $800 and shoes which cost over $600 that would potentially be used in a TikTok video. DG suggested a smaller budget and because DG would not approve these expenses Shaw distanced herself from DG's collaborative marketing efforts.
February 2023, Shaw attempted to submit business expense reports for personal expenses, like buying four pairs of sneakers or expensing her entire grocery bills (these receipts are attached in this link). DG informed her that such activities are fraudulent and asked a lot of questions related to receipts submitted. Shaw did not respond to any of those questions.
May 2023, due to the large advances on Shaw’s royalty payment and the deduction of refunds covered by DG related to the period prior to this Agreement, the balance of milestone royalty payment owed to Shaw came to $666.86. DG decided to hold off on deducting $10,000 in advances from the royalties due until a later period so that Shaw would have more funds to cover her needs at that time and instead paid Shaw $10,666.68.
This balance and all payments processed have been outlined and communicated to Shaw consistently. DG deducted the above-mentioned advances of $10,000 at the second quarter royalty payment. The Q2 royalty payment due was less than $10,000, so the net effect was that Shaw had a negative balance of $6,005.80 that she owed to DG due to the previous advances taken. Contrary to Shaw's belief, both Q1 and Q2 royalty payments are calculated in exactly the same way, the only difference is the deduction of the advance for Q2. We clearly explained this deduction to Shaw in our email and offered to walk her and her attorney through the calculation.
June 2023, Shaw submitted an expense report to DG that included a request for payment for her time dedicated to making social media content since October 2022 (1,400 hours at $90 per hour in Shaw's invoice). Such request was outside of the terms of the Agreement as Shaw's compensation per the Agreement was through royalties and there was no provision to compensate her on a per hour basis. DG asked for clarifications related to the various other expenses listed by Shaw in the invoice, but backups, receipts and explanations were not provided. Shaw informed DG that she did not need to provide us with the receipts or explanations to get reimbursed. DG reminded Shaw that business expenses need to be pre-approved by DG.
Dave’s Gourmet has kept this timeline of information private until Shaw went to social media with defamatory statements regarding the integrity of our business which has put us in an unfortunate position to share details that would have otherwise remained private. In total Shaw has received $147,449.37 in payments from her partnership with Dave’s Gourmet and PS since August of 2022 to date (we initially told the journalists that she recieved MORE than $120,000, and now have tracked all the payments and are sharing the precise number with all the bank confirmations in this link).
It is our understanding that Shaw probably spent about $10,000 of this amount to buy video recording equipment, props, clothes and accessories that would be used to promote PS, but we have not seen the receipts confirming this.
Because of all the advances provided to Shaw, the funds sent to Shaw exceed what she has earned under the terms of the Agreement. In addition, Shaw had certain obligations in the Agreement related to her social media activities that she has violated multiple times. DG reminded Shaw multiple times that she needs to adhere to the terms of the Agreement, but she ignored DG's requests. After Shaw went to social media to create the illusion that she is not being compensated properly, DG communicated to both Shaw and her attorney that DG will cover the costs of Shaw’s legal counsel to go through the provisions of the Agreement and the payments to confirm that the payments were correct, and DG is following the Agreement (because this is Shaw's legal counsel, we could not pay him directly and that is why we proposed to reimburse Shaw for those expenses). This proposal was rejected by Shaw.
DG's consistent support of Shaw was rooted in our desire for a successful partnership. Our primary objective throughout this partnership was to ensure the successful commercialization of PS while upholding our Company's values of integrity, transparency, and commitment to our partners and customers. Unfortunately, despite DG's continuous efforts to maintain a constructive relationship with Shaw, our efforts were met with recurrent challenges.
In August 2023 we sent multiple messages to Shaw and her attorney suggesting creative ways to mitigate the issues and have an amicable working relationship. In return, we received a message from Shaw that DG would need to pay her $1,500,000 if we want to continue selling PS. The current Agreement in place is evergreen and DG does not need any special extension payments, renewals or permissions from Shaw to continue selling PS under the terms of the Agreement, so Shaw's request was odd and did not make any sense.
On August 25th, Shaw notified DG that she was being evicted from her apartment that weekend due to unpaid rent. DG scheduled a call with Shaw and for approximately two hours discussed our proposal on how the relationship could work in the future. This proposal required Shaw to post the PS-related content on social media twice a week and included biweekly payments to Shaw to provide her with a stable level of income for a period of time. She agreed in principle with DG's proposal but wanted her attorney to finalize the details. Shaw then asked for assistance with her overdue rent. DG wanted to be helpful but hesitated given the prior history with Shaw. DG preferred to wait until the new agreement with Shaw was fully in place before providing any help, but that was not possible over the weekend since Shaw's attorney would need to be involved and he was not available on the weekend. And by Monday Shaw would have been evicted. In the spirit of future cooperation and creating goodwill with Shaw, DG took another chance on Shaw and paid off her past due rent totaling $14,000 (with this additional payment the total funds sent to Shaw equal $161,449.37) that weekend and prevented her and her children from being evicted (link to the confirmations). That backfired for DG (no surprise here given the history).
The following week DG sent a legal draft of our proposal discussed on the call with Shaw to her attorney. Shaw indicated that her attorney would come back to us, but he never did. In the meantime, we received another strange demand from Shaw for $250,000. And then she posted her recent video on social media with false accusations directed at DG. None of them have any merit and, bear in mind, she posted this video shortly after DG helped her and her children not get evicted.
We received many messages from people encouraging us to sue Shaw for defamation. We are considering all options, including a lawsuit, but also are mindful of the distractions that it will cause for our organization and the difficulty of collecting any court-awarded damages from Shaw given that she has spent all the funds.
We are a family-owned business, and our reputation is dear to us. We are asking for your support.
Shaw's GoFundMe page containing false claims is still live. We have reported Shaw's GoFundMe page for fraud (she lied there that she did not receive any payments, but now is admitting publicly that she has received over $120,000 in payments from DG just as we said), but GoFundMe has not taken action to remove Shaw's page where she is asking for funds under false pretenses. Please, consider reporting the page or asking for a refund if you have donated. Kyrie Irving from Dallas Mavericks donated $24K to Shaw's GoFundMe campaign (probably without knowing the facts). We want other people to have factual information on this case prior to considering making a donation. We hope that people share the facts on social media about the sequence of events related to this matter, so that Shaw can no longer spread misinformation about our Company.
Needless to say, we are very disappointed in the status of our partnership with Shaw. But we hope that you will still give us the opportunity to share our products with you. We have a huge selection of bold and flavor-packed hot sauces, pasta sauces, creamy hot sauces, olive oils and more. Please, give them a try, including Pink Sauce! You can see that it is sold at a lower price at retail now. We worked hard to bring it to market, and, despite our challenges with Shaw, we have multiple other partners that are relying on us to drive its commercialization. It has a unique taste and puts an interesting twist on salads, fries, and chicken tenders. At this time, we are unsure how long we will continue selling it and don't want you to miss your chance to try it.
Please, follow us on social media. If you have any questions, please, reach out to us on facebook or tiktok @davesgourmet Instagram @davesgourmetllc or email email@example.com. We may update this page in the future if there is additional information. We appreciate your support!