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The Federal Trade Commission has taken action against coffee shop franchise Qargo Coffee and its founders for failing to disclose critical information required by the Franchise Rule, including one founder’s ties to burger franchise BurgerIM, leaving prospective franchisees in the dark when deciding whether to invest in the franchise.
In its complaint, the FTC alleged that Qargo and founders Mark Bastorous, Bernadette Bastorous, and Samir Shenouda violated the FTC’s Franchise Rule—the agency’s second case in recent years alleging violations of the Franchise Rule.
Under proposed order, the company and its founders are required to pay $30,000, provide franchisees the right to rescind contracts, and void noncompete agreements.
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