In my experience you would engage the would be robber. He is a threat to Fred, yourself, and any persons he would encounter in his flight from the scene. I would begin shooting as soon as soon as you clearly identified the threat (i.e. revolver) and would only stop shooting once the threat is neutralized. I concur with all who have said that you have no duty to retreat in this scenario. Also the civil implications of your actions should never enter your head. The Supreme court has consistently ruled that you are justified in situations such as this even if the firearm is not realistic, functioning, ect. It goes to your state of mind at the time of the incident not four years later. The cliche "judged by ten not carried by six" holds true in this situtation. My advice would be two in chest one in head.