Take that, Delaware.
After winning the right to incorporate in that allegedly business-friendly state, Illegal Pete's, the company that got its start in a 600-square-foot Boulder burrito joint in 1995, will incorporate in Colorado instead.
Last year, Pete Turner, the founder and CEO of Illegal Pete's, filed to restructure his growing company as an LLC in Delaware "for financing purposes," he explained, even though as a longtime Colorado business, it "bothered me to think about incorporating in Delaware."
But it bothered him a lot more when, early this year, Delaware refused to incorporate Illegal Pete's, claiming the name had "a negative connotation" and "might cause harm to the interests of the public or the state." This wasn't the first time that Illegal Pete's had gotten grief over its name — Turner got an earful when he opened a spot in Fort Collins in 2014, and then his first out-of-state store in Tucson, where activists complained that the name was a reference to undocumented immigrants — and Illegal Pete's sued Delaware for First Amendment infringement.
This summer, the Delaware Secretary of State settled the lawsuit out of court, agreeing to pay the company's legal fees and changing its naming guidelines for corporate entities. Illegal Pete's waited to comment on its victory until it had received the final payment...and then delivered a final kick to Delaware:
Illegal Pete's is now in the process of re-registering in Colorado, a process that should be complete by the end of the year, in time for the company's 25th anniversary celebration in 2020.
"This was an interesting linear elevation of the 'Illegal' word issue we first encountered in 2014," says Turner in a release announcing the settlement. "We took this debate to the courts, suing the State of Delaware for First Amendment infringement, and winning; we see this as vindication of our position."
He was vindicated in Arizona, too, where Illegal Pete's now has a second store in Tempe and business continues to be brisk. But first he had to have some tough conversations, explaining that the company's name has no racial or immigration-related connotations. Instead, Illegal Pete's was named to honor Pete Turner Sr., the founder's father, who was "a bit of a good-natured hell-raiser in his day," according to the company's website. The senior Turner, an original investor, passed away from cancer in 1997. But he remains an inspiration.
And when Delaware snubbed Illegal Pete's, his son knew what to do: "If Dad were still around, he'd say, 'Fuck ’em, this is wrong. You know your truth.'" And that truth is rebellion, not racism.
Delaware doesn't ban the word "illegal" altogether; among the 1.3 million businesses incorporated in Delaware are Illegal Civilization Inc. and Illegal People Touring Inc. (not to mention Knife in the Back LLC and Killer Beverages LLC, the Associated Press points out). Given that, Turner and his attorney had to believe that an alleged connection with immigration had something to do with the denial.
"In our current political times, divided and filled with racial tension, 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,'" Illegal Pete's said in a statement released at the time. "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. It's in this spirit that we challenge the decision made by Delaware officials."
Illegal Pete's had a timely assist from the U.S. Supreme Court: In June, that court struck down a section of federal law that prevented officials from registering "scandalous" or "immoral" trademarks in a case involving the fashion brand FUCT. Soon after, Delaware settled the Illegal Pete's case and started soliciting public comment for new regulations to guide the state in handling business names "likely to violate the law, mislead the public or to lead to a pattern and practice of abuse that might cause harm to the interests of the public or Delaware."
But Delaware won't have to worry about Illegal Pete's again. Turner decided against taking advantage of any business benefits offered by that state.
"This was a reminder that Illegal Pete's always has been and always will be a Colorado company," says Turner. "Even as we continue to grow out of state, with two locations in Arizona and even more out-of-state locations planned in the future, we'll always call Colorado home."
Colorado currently has nine Illegal Pete's locations, with two more slated to open in 2020: right next to the Little Man Factory at 4411 West Colfax Avenue, and at 2230 Oneida Street. Turner has plans to double the number of stores within the next few years while continuing to push for local support of the arts and other community endeavors.
"We’re glad to have this behind us so that we can focus on our 25th-anniversary year," says Turner. "We’ve got a ton planned…year-long events leading up to a three-day party Labor Day weekend, and a year-long art project surrounding each location, and a full brand refresh."
He's living up to his company's motto: "The More, the Merrier." And there's nothing illegal about that.
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