DDR Escorial sues Arby’s franchisee in Carolina over $1.49M lease default
The property owner in Puerto Rico says the former tenant left the site and broke its financial obligations.
DDR Escorial LLC, owner and operator of Plaza Escorial in Carolina, has filed a breach of contract and collections lawsuit seeking $1,492,672.96 in unpaid rent and damages related to a terminated lease agreement with the former operators of an Arby’s restaurant at the shopping center.
The lawsuit, filed last week in San Juan Superior Court, names ARVG Corp., MP Puerto Rico Inc. and RB’s Puerto Rico Inc. as defendants.
According to the complaint, the dispute centers on a 10-year commercial lease signed Aug. 18, 2021, for a 5,000-square-foot space with a drive-thru. RB’s Puerto Rico initially signed the lease, but the location was intended to be operated as an Arby’s restaurant by ARVG Corp. On Oct. 8, 2021, RB’s assigned the lease to ARVG.
DDR Escorial stated that under the agreement, it retained the right to pursue claims against RB’s and MP Puerto Rico — which acted as guarantor — if ARVG defaulted.
“The lease agreement required the tenant to make monthly minimum rent payments, percentage rent based on gross sales and other charges including taxes,” the landlord said in the filing. “The tenant agreed to make all payments on the first of each month, which they failed to do.”
The landlord alleges that the tenant repeatedly defaulted and failed to cure the violations despite multiple written notices. A formal notice of default was issued on Jan. 23 for $25,046.01 in unpaid charges. A second notice followed Feb. 24, stating a balance of at least $15,970.53 remained.
On March 11, DDR Escorial formally terminated the lease and notified the defendants that they owed $1,509,597.48 for the remaining term through March 2032.
“The Lease Agreement stipulates that termination due to default does not release the tenant from payment obligations for the remainder of the contract term,” the filing states.
The restaurant, which opened in late 2022, ceased operations on April 11, 2025, following a cease-and-desist order issued in a separate court action brought by RB’s Puerto Rico against ARVG. DDR Escorial cited the shutdown as further evidence that the tenant violated its obligation to operate continuously during business hours.
“Despite being given multiple opportunities to cure the defaults, the tenant has failed to pay or vacate,” the lawsuit adds. “This behavior reflects a pattern of operational mismanagement and repeated contractual violations.”
In addition to nearly $1.5 million in damages, DDR Escorial is seeking legal fees and costs. The amount sought excludes interest and other penalties as of May 9.
The landlord is also asking the court to hold MP Puerto Rico liable as guarantor and to hold RB’s Puerto Rico accountable under the original lease and the assignment agreement.
