Coffee Beanery franchisees Richard Welshans and Deborah Williams have filed a lawsuit against the attorney and law firm responsible for preparing the franchise disclosure document which they relied on in purchasing their franchise in 2003. They allege the franchisorâ€™s legal counsel knew that the Uniform Franchise Offering Circular (under a new FTC upgrade, it is now called the Franchise Disclosure Document) was in violation of Marylandâ€™s franchise law because it failed to disclose required information and misstated certain facts. Filed in Maryland federal court by Harry M. Rifkin and the Franchise Business Law Group, the suit claims that in preparing the UFOC the firm omitted a felony conviction on one of Coffee Beaneryâ€™s officers, the differences between the mall traditional retail coffee store and other concepts, the gift card program, a contract it had with Pepsi and the mandatory DMX Remote Eyes and Music Program.
Further, the complaint states that at their arbitration hearing in February 2007, JoAnne Shaw, president of The Coffee Beanery, testified that Paul R. Fransway of Pear, Sperling, Eggan & Daniels prepared the disclosure documents provided to the franchisees and that they advised Coffee Beanery on what information to include and exclude. Shaw testified that her company relied on the advice the attorneys gave in preparing and registering the UFOC.