Do franchisee attorneys cheat at settlement time?

Attorneys provide services that economists classify as credence goods which are quite susceptible to fraud.

Franchisee attorneys sometimes act on their own self-interest because only the elites know the game and they mostly keep their mouths shut. After the confidentiality agreements are signed, there is very little danger of client complaints.

Here is one perspective on the U.S. Quiznos class action lawsuit settlement process that resonates.

If you were a conspiracy theorist, might you suspect something like…..

The lawyers for both sides colluded to end the case in a manner that got the franchisees nothing; cost the franchisor nothing other than its legal fees (because the debt written off was worthless anyway); the “benefits” to the franchisees are illusory and valuless; the judge would sign off on anything just to clear the case from his docket so long as he had some/any piece of paper in the record saying that the franchisees were getting real value; and they found a valuation “expert” with a degree in alchemy.

NAH! THEY WOULDN’T DO THAT.WOULD THEY?

Richard Solomon has over 40 years of franchise law experience in the United States and his Franchise Remedies site is an important resource.

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2 Responses to Do franchisee attorneys cheat at settlement time?

  1. There is a natural conflict of interest between any party and their attorney when it comes time to settle. This conflict is magnified in class actions, and this case Richard was right to point out the puffed upon valuation of settlement.

  2. Carol Cross says:

    Those who buy passage to sail on the Franchise Ship of Fools thinking that they are going someplace are fooled the second time around in litigation. The ship never leaves the safe harbor of the law that protects the franchisors from common law fraud and intentional tort, etc…

    Richard Solomon tells it like it is. The Quiznos settlement was good for everybody but the franchisees and it is business as usual at Quiznos and the other big corporate franchisors like Cold Stone, Mbe-UPS, Curves, etc… The Judges know that it will be even worse for the franchisees if the franchisor goes into bankruptcy and view these “token” settlements as the only feasible solution.

    So Sad! So many have been had! Roses are red, franchising is “blue” and sucks the life out of you!

    http://thegreatfranchisingrobbery.blogspot.com

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