Edwards, a former standout at Michigan, makes the claims in a civil suit filed in Oakland County Circuit Court. It accuses the South restaurant and bar in Birmingham and three of its employees of slander, extortion and malicious prosecution.
Edwards claims he had an offer from an NFL team with $15 million guaranteed, the suit says.
"Mr. Edwards' offer was rescinded before it could be accepted because of the false, misleading, and/or negligent statements" that came out after his name was linked to the Aug. 1 fight at the restaurant.
Edwards "was forced to take a contract with a different NFL team "for only $1 million" in guaranteed money. Last month, Edwards signed a $3.5 million, one-year contract with San Francisco.
"The events of that evening in question, including the false and malicious allegations directed toward Braylon, have damaged his reputation and earnings potential," Edwards' agent, David Russell, said in a statement to The Associated Press.
Kelly Allen, a lawyer for the restaurant, expressed confidence that the claims will not prevail in court.
"We don't know anything about Mr. Edwards' contract negotiations," Allen said. "I trust the courts will do the right thing."
Two members of Edwards' group were arrested after two restaurant bouncers were assaulted at the restaurant, police have said. Edwards was interviewed by police, but was not charged in the case.
According to the suit, Edwards was attending a class reunion at the restaurant, was seated in the VIP section and "paid a South employee consideration for increased security and privacy."
Patrons at a nearby table began harassing Edwards and his group, and that restaurant employees "swarmed the area" and confronted men at his table, according to the lawsuit.
Edwards said he was directed out of the restaurant through a rear door, but was blocked by an employee wielding a broom handle. Edwards said the man rushed him, causing both to fall to the floor.
The next day, he received text messages indicating that unless he paid that employee and two other South workers "they would go to the press and file a complaint with police," the suit says.
"Braylon is not going to stand idly by while those responsible for the incident attempt to take advantage of his success and celebrity," Russell said.
Edwards won the Biletnikoff Award at Michigan as the top receiver in the nation before he was drafted third overall in 2005 by the Cleveland Browns.
In January 2010, Edwards pleaded no contest in Cleveland to aggravated disorderly conduct after being accused of punching a friend of NBA star LeBron James. Edwards was a member of the New York Jets when he arrested last September in Manhattan for drunken driving.