Franchise Fraud: Hard to Swallow

What you pay for when you lose in arbitration.

In civil court, the law almost never requires a losing party to cover the winner's legal costs, let alone its lunch tab. Arbitration is different. Here are the expenses Deborah Williams and Richard Welshans were obliged to pay after losing to Coffee Beanery.

Court reporter/transcription fees: $35,571.24

Holiday Inn conference room: $2,808.16

Arbitrator's fee: $16,800

Arbitration association fee: $8,500

Past-due franchise royalties: $13,710.16

Cost to deliver, house, and feed opposing witnesses: $2,700.14

Coffee Beanery lawyers' lunches: $504.25

Beanery lawyers' commute: $926

Beanery's legal/accounting fees for arbitration, and for defense against Maryland state investigation, to which the couple was not a party: $105,932.40

Total: $187,452.35