FDD Items 3 & 4 · 2025 filing
Qargo Coffee litigation history
What Qargo Coffee disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 (litigation) & 4 (bankruptcy) at a glance
What the filing discloses
- Cases disclosed
- 1
- Item 3, as counted in the filing
- Largest settlement, franchisor's own cases
- $30K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed · an officer
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Item 3 (litigation) · 1 matter disclosed
Litigation cases
The franchisor
Concluded (1)
Federal Trade Commission v. Qargo Coffee, Inc., Mark Bastorous, Bernadette Bastorous, and Samir Shenouda
settledGovernment or regulatory action · filed 2024-10-16 · S.D. Fla. · Case No. 24-cv-23978-RAR
“… (S.D. Fla. Case No. 24-cv-23978-RAR). On October 16, 2024, the Federal Trade Commission (“FTC”) filed a Complaint for Permanent Injunction, Monetary Judgment and Other Relief against Qargo Coffee, Inc., Mark Bastorous, Bernadette Bastorous, and Samir Shenouda.”Page 19 of the 2025 FDD, Item 3
Outcome: “On October 17, 2024 the court entered an agreed upon settlement between the parties wherein, Qargo Coffee, Inc., Mark Bastorous, Bernadette Bastorous, and Samir Shenouda agreed to pay a monetary judgment of $30,000, offer rescission to all franchisees and licensees and submit regular reports to the FTC acknowledging compliance and the court entered a Stipulated Order for Permanent Injunction, Monetary Judgement and ...”
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
On Dec 8, 2017, Co-founder/Director of Product & Vendor Management Bernadette Bastorous and Development Manager Mark Bastorous filed a Chapter 7 bankruptcy petition (In re: Bastorous, No. 6:17-bk-20092-MH, C.D. Cal. 2017); Mark Bastorous's case was dismissed Sept 30, 2020; Bernadette Bastorous received a discharge July 14, 2022. This was a personal bankruptcy of two officers, not the franchisor entity.
Disclosure signals that moved the score
How this shows up in the verdict
- Old personal Chapter 7 bankruptcy of co-founders (2017, resolved ~2020) - low weight
- No litigation or going-concern
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?