Mostra Coffee went from roasting beans in a San Diego garage to winning national awards, opening cafés across the county and partnering with the Padres. But behind its celebrated Filipino-inspired coffee drinks and ambitious expansion plans, former employees say their paychecks were bouncing, landlords and creditors were taking the company to court, and customers were increasingly struggling to purchase the coffee that made Mostra famous.
A review of public records reveals at least ten civil lawsuits filed in San Diego County since October 2025 involving Mostra Coffee or affiliated businesses, along with a separate lawsuit in New York and five wage claims filed with California labor regulators. The mounting legal disputes come amid customer reports of dwindling coffee inventory, canceled subscriptions, unanswered inquiries and changes to café operations, raising questions about the future of one of San Diego's most recognizable independent coffee companies.
In a written statement provided to SanDiegoVille ahead of publication, Mostra's co-founders acknowledged significant business challenges but firmly rejected speculation that the company is preparing to shut down.
"Mostra is not restructuring, reducing operations, or considering closure," the company stated. "Our cafés remain open and continue serving our expanding menu of signature beverages, seasonal specials, and food offerings."
The founders attributed some of the company's difficulties to the lasting effects of the pandemic, rising operating costs, tariffs and broader economic pressures, as well as prolonged construction affecting businesses in Hillcrest. They also disclosed that two co-founders experienced life-threatening illnesses that required them to step away from their usual responsibilities.
"We share this not to excuse our shortcomings or diminish anyone else's experiences, but to offer an honest picture of the human realities behind running a family business," the founders wrote.
Founded in 2013 by Filipino-American friends Beverly and Ronald "Sam" Magtanong, Jelynn Malone and chef Mike Arquines, Mostra began as a small roasting operation in a 4S Ranch garage. Its founders set out to introduce Americans to coffee grown in the Philippines while supporting Filipino coffee farmers, eventually building a brand known for inventive drinks like its Bibingka Crème Brûlée Latte.
The accolades followed. Mostra was named Roast magazine's 2020 Micro Roaster of the Year, company roaster Nick Berardi won the 2022 United States Coffee Roasters Championship, and the business received additional national recognition from the U.S. Chamber of Commerce in 2024. Mostra also established a presence at Petco Park, introducing its coffee to Padres fans while expanding its footprint across San Diego County.
Mostra also developed deep ties to San Diego's craft brewing industry, collaborating with breweries including Stone Brewing, AleSmith, Karl Strauss and Abnormal Beer Company on specialty coffee-infused beers. By 2019, the company reported participating in more than 600 beer collaborations, including Stone's nationally distributed Xocoveza Mocha Stout. Those relationships helped establish Mostra's reputation well beyond the coffee industry, connecting its growth to San Diego's once-booming craft beer scene, which has since faced its own wave of closures, consolidation and financial challenges.
By September 2024, the Mostra founders were discussing even more ambitious expansion plans, including additional cafés and a possible location at San Diego International Airport. Less than two years later, however, the company is confronting a very different reality.
SanDiegoVille began investigating Mostra's payroll practices in August 2026 after readers raised concerns about the company in comments on our social media post concerning a lawsuit involving San Diego's Holy Matcha. Several individuals identifying themselves as former Mostra employees subsequently came forward with accounts of repeated bounced paychecks, delayed wages and replacement payments issued through Venmo or Zelle, sometimes after workers had already waited beyond their regular payday.
By September 2024, the Mostra founders were discussing even more ambitious expansion plans, including additional cafés and a possible location at San Diego International Airport. Less than two years later, however, the company is confronting a very different reality.
SanDiegoVille began investigating Mostra's payroll practices in August 2026 after readers raised concerns about the company in comments on our social media post concerning a lawsuit involving San Diego's Holy Matcha. Several individuals identifying themselves as former Mostra employees subsequently came forward with accounts of repeated bounced paychecks, delayed wages and replacement payments issued through Venmo or Zelle, sometimes after workers had already waited beyond their regular payday.
One former manager, who said they joined Mostra in 2023 as part of the Hillcrest opening team and eventually managed both Hillcrest and Bankers Hill, alleged that their first paycheck bounced. The source claimed similar incidents continued throughout their employment, sometimes affecting multiple workers during the same pay period.
Another former employee, who said they worked for Mostra for approximately two years, independently described receiving a bounced paycheck and disputed suggestions that the problem was isolated.
"I knew damn well it had happened to many of my coworkers time and time again," the former employee told SanDiegoVille.
The allegations extend beyond late paychecks. One former manager claimed that health insurance premiums continued being deducted from certain employees' wages after their coverage had been discontinued. The same source alleged that some employee retirement contributions withheld from paychecks were not properly deposited into their 401(k) accounts.
Mostra's leadership has previously acknowledged that the company experienced financial difficulties affecting employee paychecks.
"We went through a real cash flow challenge as a small business, and it did affect a few paychecks," co-founder Mike Arquines told SanDiegoVille in August. "As soon as we were made aware, we addressed it with the employee."
Arquines confirmed that Mostra sometimes used Venmo or Zelle to compensate workers, explaining that the arrangements were made with employees' agreement to provide replacement payments more quickly.
In its latest statement, the company addressed the broader concerns without responding individually to the allegations involving insurance deductions, retirement contributions or whether every affected employee has been fully compensated.
"We recognize that concerns have been raised regarding employee compensation, benefits, and other financial and legal matters," the founders wrote. "We take these issues seriously and are addressing them appropriately."
The company said some matters are subject to administrative proceedings, litigation or ongoing negotiations and declined to discuss specific allegations while those proceedings remain unresolved.
"We also believe we are in compliance with all laws, and we are committed to participating in these processes, fully fulfilling our obligations, and treating everyone involved fairly and respectfully," the statement continued.
A review of California Labor Commissioner's Office records identified five wage claims filed against Mostra Coffee Inc. between February and October 2026. All five were listed as under investigation as of October 30, and one also names co-founder Ronald Magtanong individually.
The public records do not identify the employees involved, the amounts sought or the specific allegations underlying each claim. The filings do not establish that Mostra or its founders violated labor laws, but they independently document that multiple wage disputes have reached state regulators.
At the same time, Mostra and its affiliated businesses have become involved in a growing number of legal disputes with landlords, vendors and financial institutions.
San Diego Superior Court records show commercial eviction proceedings involving multiple Mostra locations, including its 4S Ranch café at 10550 Craftsman Way. The landlord filed an eviction lawsuit in April 2026 after dismissing an earlier action, and Mostra is contesting the case. A hearing is scheduled for November 13.
The City of San Marcos has also pursued a commercial eviction action involving a Mostra-affiliated business. Other lawsuits have been filed by American Express, Cintas and additional creditors and suppliers, while a New York contract lawsuit brought by business financing company Finpoint Funding names Mostra and founders Ronald and Beverly Magtanong. Some proceedings have been dismissed or settled, while others remain pending.
In response, Mostra said it is "actively working toward resolving existing matters with third parties," although the company did not provide details concerning individual lawsuits, disputed amounts or proposed settlements.
The founders also confirmed that Mostra Coffee Inc. was briefly suspended by the California Franchise Tax Board in early 2025, stating that the suspension was promptly cured. The company did not elaborate on the circumstances that led to the suspension.
Meanwhile, customers have increasingly taken to social media to question what is happening to the business.
A recent discussion on Reddit's r/SanDiegoCoffeeBeans forum, titled "What's up with Mostra?", drew dozens of comments from customers describing unavailable coffee beans, canceled subscriptions, unanswered emails and changes at cafés that once carried an extensive selection of specialty roasts.
The discussion began with a customer who said Mostra's roasted coffee had been unavailable for online purchase for months despite repeated attempts to order. Other customers quickly shared similar experiences, including one who reported finding the Sorrento Valley café closed and another location nearly out of coffee.
A Carmel Mountain Ranch customer described noticeably fewer bags of beans on the shelves, while another commenter alleged that the Bankers Hill café had limited inventory, boxes piled throughout the space and deteriorating cleanliness. A Hillcrest customer reported reduced operating hours that made visiting the location increasingly difficult.
The complaints extended to Mostra's online business. One customer said they canceled their subscription after their preferred roast remained unavailable for months and website problems went unresolved. Another reported placing an order that was never shipped, although the company eventually provided a refund.
Perhaps most striking was a comment from someone identifying themselves as a former Mostra employee, who alleged that the company struggled with ingredient shortages, late paychecks, poor management and favoritism. The commenter also described an incident in which an owner allegedly asked employees to guess how much money he earned during their orientation.
Mostra's latest statement also clarified the status of its former Torrey Pines café, which customers had reported was closed. According to the company, the location was converted from a traditional café into a wholesale partnership after the landlord decided to repurpose the space for a food establishment serving building tenants.
"We are pleased to continue serving the building and its community through this ongoing partnership," the founders stated.
The company did not specifically address questions about the status of its Petco Park operation, the previously announced Mira Mesa drive-thru location or the reported shortages of roasted coffee available for online purchase. It also did not directly explain the customer accounts of canceled subscriptions or unfulfilled orders.
Mostra's website continues to advertise cafés in Carmel Mountain Ranch, 4S Ranch, Bankers Hill and Hillcrest. Although the company maintains that its cafés remain open, SanDiegoVille has not independently verified the current operating status or hours of each location.
The founders emphasized that Mostra remains a family-owned business supporting employees, their families and coffee-growing communities in the Philippines and elsewhere. They said some employees have remained with the company for eight to twelve years and that its mission continues despite the difficulties.
"Behind our company are dedicated employees, some who have grown alongside us for eight to twelve years, their families, and the farmers and communities whose livelihoods are connected to the coffee we purchase," the founders wrote.
The company also acknowledged that its responsibilities to employees and business partners remain in place regardless of the circumstances contributing to its difficulties.
"We recognize that our responsibilities remain, even during our most difficult moments," the statement said. "Through these challenges, we have continued working to strengthen Mostra, support our team, and honor the commitments we have made to the people who depend on us."
The response provides the clearest public indication yet that Mostra's founders intend to continue operating the business rather than pursue closure or restructuring. It also offers an explanation for some of the pressures the company says have affected its operations, while leaving several specific payroll, benefits, customer-service and financial questions unanswered.
For a business that grew from a garage-based roasting operation into one of San Diego's most acclaimed coffee brands, the stakes extend beyond its cafés. Employees, creditors, landlords, customers and the coffee-growing communities Mostra has long championed all have an interest in whether the company can resolve its outstanding disputes.
For now, Mostra's founders insist the company is continuing forward, even as some legal disputes and employee complaints remain unresolved.
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Originally published on November 2, 2026.
