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WASHINGTON, D.C. (Blue MauMau) - Last Thursday, Deborah Williams and Richard Welshan, franchisees of Coffee Beanery, went before the House Subcommittee to tell their story of how mandatory arbitration in franchising contributed greatly to their demise. In Deborah Williams' testimony she stated, "I am 54, bankrupt and on the verge of being homeless, all because of a binding mandatory arbitration clause." Williams and Welshans are supporting the “Arbitration Fairness Act of 2007, Bill H.R. 3010, sponsored by Rep. Hank Johnson, D-GA., which would ban pre-dispute mandatory binding arbitration, in which consumers. . . give up their rights to sue and agree to enter arbitration instead." U.S. Reps. Elijah Cummings, D-Baltimore, and John Sarbanes, D-Towson, are co-sponsoring the bill.
Although franchisees do not come under the "consumer" label, some advocates for the bill are adding franchising to their message. Paul Bland, staff attorney for Public Justice, said in his testimony, "H.R. 3010 would ban the use of pre-dispute binding mandatory arbitration in consumer, employment, franchise and medical contracts." His article, Yesterday's Hearing on Arbitration, for Public Citizen gives highlights and testimonies of the hearing.
Williams said the entire process was very powerful and exhausting. As she told her story of how they had to travel 500 miles for the 11-day arbitration costing $100,000 in fees, Rep. Chris Cannon R-UT, fighting against the bill, tried to get her to admit that she could only blame herself for her problems. He indicated that she did not research the Coffee Beanery on the Internet and discover in advance that they were defrauding people. According to Bland's testimony, "Ms. Williams described the various steps that she had taken to do due diligence about the Coffee Beanery prior to becoming a franchisee, but Rep. Cannon persisted in trying to get her to say that her problems were all her own fault." Williams said Rep. Cannon asked her, "I guess you think all franchisors are unfair?" She said she stood her ground in answering. "I told him no. That is not what I said."