Professional Liability

Lawyers not familiar with the array of franchising laws and regulations face the prospect of serious malpractice liability for injuries caused by their failure to know and follow the law. Carmen has prosecuted, defended, and served as an expert witness in several cases:

• The president of the State Bar in Nebraska enlisted Carmen to join the team defending a law firm charged with legal malpractice in negligently preparing franchising agreements and disclosure documents for their client, a local coffee shop business that sought to launch a national franchising program and then tried to cover up errors. There was no cover-up, and the damage claim was wildly inflated. Carmen helped the defense successfully establish that the coffee shop franchisees were dissatisfied due to the franchisor’s false earnings claims, not to the result of non-compliance with the FTC Franchise or any action made by his lawyer.
• Carmen initiated claims for legal malpractice against a prominent Intellectual Property law firm initially retained to protect the patents and trademarks of a “green” technology start-up company. The firm expanded its scope of representation to prepare a franchise agreement for the client to use in selling franchises. But it did not comply with the FTC Franchise Rule and applicable state laws. These claims were settled on the eve of trial.

Carmen has rendered valuable “second opinions” to clients concerned with ethical and competency issues arising in representation by other lawyers in the franchising sphere. He has identified errors of judgment and conflicts of interest by lawyers representing his opponents in franchising cases and has used them to obtain better results for his clients.