'Shahs of Sunset' Star Mike Shouhed Talks Feud with Costar Reza

"Shahs of Sunset" star Mike Shouhed is dumbfounded as to why his longtime friend and costar, Reza Farahan, is taking their beef to the next level by threatening to sue him.

We got Mike out at Equinox in L.A. Friday afternoon and asked about Reza firing off a cease and desist letter, threatening to sue if Mike doesn't stop selling t-shirts with Reza's face.

Quick backstory ... on the last season of 'Shahs,' tensions were running high between Mike and Reza, and they had several heated arguments. One of their biggest issues is the fact Mike's been hawking t-shirts on his website for 3 years ... and one of them has Reza's mug and the words "Reza is My Homeboy."

Reza's known about it, but now that they've been at each other's throats ... he sent the letter claiming Mike's merch sales violate Reza's rights to control the marketing of his own likeness and image.

Mike posted the letter on Instagram with the caption, "Guess he's not my homeboy! lol ... this is what happens when dudes got his panties in a bunch!"

Mike tells us he started selling the shirts as an homage to his friends on the show and he gets EVERYONE'S permission before pimping the shirts. His best explanation for Reza getting lawyers involved -- pettiness.

Mike says he's not trying to go back and forth on social media, and instead says he'll just lawyer up too.