Qargo Coffee
Also known as: Qargo.
The FTC alleged that Qargo Coffee and its founders withheld required franchise information and misrepresented executive history, startup timing, and bankruptcy disclosures. They agreed to a proposed order requiring a $30,000 payment.
Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.
Identity
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- Registrations
- Qargo Coffee (FTC Franchise Rule enforcement action, 2024)
- Jurisdictions
- United States (federal)
Proposed order addressed franchise disclosure violations
The Federal Trade Commission took action against coffee shop franchise Qargo Coffee and founders Mark Bastorous, Bernadette Bastorous, and Samir Shenouda. The FTC alleged that they violated the Franchise Rule by failing to give prospective franchisees critical information needed to evaluate an investment. The release says Qargo’s founders had offered the franchise throughout the country since May 2020.
According to the complaint, the franchise disclosure document omitted information about executives’ business history and experience. The FTC also alleged misrepresentations about how long it would take to open a franchise and whether bankruptcies had to be disclosed. In California, Qargo allegedly called franchisees “licensees” and did not provide prospects with a franchise disclosure document.
Qargo and its founders agreed to a proposed order imposing a $1,258,575 judgment. Based on their stated inability to pay the full amount, the proposed order required payment of $30,000 and suspended the balance. It also required notice to franchisees and licensees of a right to rescind without penalty. The proposed terms restricted enforcement of noncompete provisions against those who rescinded, prohibited material misrepresentations or omissions, and required compliance with the Franchise Rule.
What is not established
The release describes an agreed proposed order and says stipulated final orders have the force of law when approved and signed by a district court judge. It does not state a consumer-loss total or report a trial finding.
Sources
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- Enforcement action October 16, 2024
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First recorded October 16, 2024 · Last updated October 16, 2024