Franchising Scandal Threatens Global Success of Laser Clinics

Laser Clinics, a renowned global retail franchise network, is facing a tumultuous time as a franchising scandal unfolds across its operations. The company, which specializes in laser hair removal and cosmetic treatments, has seen a wave of negative reviews and closures of its stores globally, leaving customers in the lurch.

Established in Australia in 2008, Laser Clinics has expanded to over 200 clinics worldwide, with a notable presence in the UK, Australia, New Zealand, and Canada. However, recent closures of stores in the UK have triggered a public relations crisis, with customers expressing dismay on social media, in newspapers, and on TV.

KKR, a private equity giant known as ‘barbarians at the gate,’ acquired Laser Clinics in 2017, leading to friction with franchisees who now allege mistreatment and unfair business practices. The current situation has sparked threats of legal action from franchisees feeling marginalized and driven out of business.

The franchising sector, which plays a significant role in Australia’s economy, has been marred by scandals in recent years. Entities like Domino's and the Banking Royal Commission have faced scrutiny for exploiting franchisees, a trend that has now ensnared Laser Clinics.

Despite initial success under the stewardship of Babak Moini and Alistair Champion, the original founders, franchisees believe that KKR’s profit-focused approach is jeopardizing the network’s sustainability. Franchisees lament the shift towards short-term gains over long-term partnerships.

The ongoing turmoil in the UK reflects broader challenges within Laser Clinics, with reports of franchisees struggling to find buyers for their failing clinics. Pricing strategies dictated by the head office have further exacerbated the situation, pushing some franchisees to the brink of closure.

Amidst legal battles, financial uncertainties, and operational mismanagement, Laser Clinics faces a pivotal moment in its global expansion. How the company addresses these issues will determine the future of its franchise network and reputation in the skincare industry.