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« Wall Stree Journal Article on Medical Spa Franchises: Medspa boom is a bust for some | Main | When Young Doctors Strut Too Much of Their Stuff »
Wednesday
Nov222006

Sona MedSpas: An unhappy franchise owner.

Ron Berglund, a Sona medspa owner, left this comment on one of the most widely read articles on this site: What's wrong with medical spa franchises? The article Ron refers to is referenced here: Medspa boom is a bust for some.

"You may want to check out the November 21 issue of the Wall Street Journal. There is a very informative article about mdeical spas (primarily the Sona MedSpa and Radiance franchises).

Having been a franchisee (St. Paul, MN) for almost three years and now facing personal bankruptcy and financial ruin, I can vouch for the accuracy of the article. I have personal knowledge that perhaps 33% (and maybe over 50%) of the Sona franchisees have either already failed or are struggling. The Sona business model-- and I am guessing most of the franchised medspa models-- are replete with flaws, problems and booby traps.

For starters, any business that tells you to spend 25% of gross revenues on marketing and advertising is giving you a recipe for financial disaster down the road. Relying almost entirely on inflated revenues from prepaid multi-treatment packages (allowing you to take in - and spend-- thousands of dollars today without making any provision for the steadily growing future service liabilities) are also a trap for the undercapitalized and unsophisticated. Finally, Sona encouraged us to commit the mortal sin of cosmetic practice-- they coached us to overpromise results to the point of commiting fraud with thousands of clients. When the Sona-required lasers failed enable us to deliver these impossible results we were literally murdered with demands for additional treatments.

I predict a huge "shakeout" in 2007 as other medspa franchisees hit the courthouses with litigation and financial nightmares. The profitable delivery of esthetic medical services is a tricky and demanding challenge for anyone. I believe it takes a unique combination of business and marketing acumen together with great medical skill and emotional intelligence to navigate these tumultuous waters without drowning."

Ron Berglund 

The article Ron refers to is referenced here: Medspa boom is a bust for some.

From the same thread.

JustCurious asks: How does a medspa franchisee handle closing its doors? Aren't there agreements (in years) that must be signed with the franchisor and wouldn't there be penalties for closing shop? I've notice several medspa franchises closing or selling their business within 2 years of opening their doors and I'm wondering (a) what motivates them to close or sell so quickly and (b) what the penalties of closing/selling could be. Also, if a franchisee sells their medspa in this "billion dollar industry" so quickly, is that usually an indication of a failing business?

Dear Just Curious: Thanks for the response to my recent comment. You are asking two additional questions which are very important with regard to the subject at hand. First, you are asking how does a medspa legally close its doors. Closing shop would be no problem if all transactions were handled on a "pay as you go" basis. Unfortunately, most med spas sell primarily multi-treatment "packages". The Sona model encouraged us to do that almost exclusively. We typically sold five-treatment packages for laser hair removal, and often offered BOGO promotions wherein the client would purchase -- and pay cash up front for --five treatments at the "regular" price (full bikini @ $975 for example) and then would receive five FREE treatments for the underarms area. I had an excellent first year of operations since I was taking in thousands of dollars each month for treatments to be performed in the future. After signing up an average of 100 clients per month and pushing the future service obligation forward, you end up "painting yourself into a corner" and facing an insurmountable liability for performing treatments already paid for. Jeff Nebot had the same problem in St. Louis, except that his numbers were typically about triple my numbers. As this isn't enough of a problem, just imaging what happens when you try to sell or close the business!! You have several thousand clients who have prepaid and are legally entitled to the treatments they have already paid you for-- but you cannot afford to keep the Pnonzi scheme going! Believe me-- this makes any medspa almost impossible to sell because any prospective purchaser is scared to death to walk into this huge liability. That is the primary reason Jeff Nebot and I ended giving away our centers for free. Our buildout, furniture and equipment in St. Paul had cost us almost a million dollars and Jeff Nebot's investment was probably twice as much. I know first hand of several former Sona franchisees losing more than a million dollars on the whole mess-- in addition to a million headaches. There was a story posted on the Internet about the former Salt Lake City Sona franchisee closing her doors and failing to provide hundreds of clients with their pre-paid treatments. The article stated that Utah authorities chased the owners down in Texas and instituted some type of legal proceedings against them. I never heard how the matter was resolved, but I heard that the state was trying to impose some stiff penalties against the (Sona) owners.

Your second question asked how can it be that all these problems are occuring when this "med spa boom" is supposed to be happening all around us. The answer-- in my opinion-- is that the so-called med spa "boom" is to a large extent hype. I predict that the majority of the marginal operations will fall by the wayside during the next twelve month and the survivors will be the operatoins that are well funded and operated on sound business principles. Sona and many of the other franchised systems were attempting to offer a "get rich quick" scheme and also a model which-- for the most part-- utilized the physician as essentialy a mere figurehead. My personal belief is that the only truly successful med spa model requires three key components: 1. The physician is the key to the business-- similar to the dentist in the traditional dental office model; 2. The physician needs to be "on site" for a number of reasons-- business, professional and regulatory; and 3. The model requires superb marketing including a ton of cross-promotion and "guerrilla" marketing. Due to competition. typical profit margins and a number of other factors, med spas simply cnnot afford to allow advertising and marketing expenses to exceed over 10% of gross revenues. Whereas most physicians already have from 5000 to 15,000 patients in their data base who can serve as a "warm" client base for a med spa, all of the franchised med spa models start with zero and need to "buy" each client they recruit. Believe me--these outrageous advertising expenses eventually catch up with you! There is a reason the typical fast food franchises absolutely require that advertising expenses remain in the neighborhood of 7% of gross revenues. In order to survive in the low margin marketplace, there is no other way.

Ron Berglund 

Reader Comments (30)

So what are those clients supposed to do now that the company is closed? Would the substitute lazer treatment center Sona sends their clients to honor the payments previously made to sona or request a payment themselves?
Jennifer: One of the hazards of taking prepayments for future treatments is that -- depending on the volume of the clinic--it can create a huge future obigation for the owner to fulfill the services. Technically, each and every patient is entitled to receive the treatments he/she paid for. Unfortunately, if the clinic owner runs into serious financial problems (see the story on the former Sona Salt Lake City operation posted on this site last year) it may become financially impossible for the clinic to fulfil the obligation. This dilemma also makes it difficult to sell a clinic which has an obligatin to honor thousands of prepaid treatments. Several of us were able to sell the assets of our businesses for a tiny sum in exchange for the buyer being willing to perform the prepaid treatments. If you simply close your doors you will probably be hearing from state authorities. In some states they have made the former owners personally liable for outstanding amounts owed to former customers.
Do you know the name of the attorney that is handling the litgation against Sona?
03.19 | Unregistered CommenterSW
SW-- There are several different law firms involved. If you send me an e-mail I can provide additional details.

Hi, no wonder Sona is in the tahnk. I attended a recent franchise event in WY. The CEO of Sona (Heather Rose) was also in attendance. She was the talk of the event, hanging all over the lead singer of some band and partying in front of her fellow board members. I also know for a fact that she is a married woman. What a fine example of leadership and for the ladies of franchising. I felt embaressed for her.

09.7 | Unregistered CommenterJT

Lets talk about how many people they have actually been phyiscally burned! I have a lawsuitfor severe burns done to me- which will stay with me forever.WHAT A HORRIFYING EXPERIENCE!
I would like to learn how many others there have also been severly burned.

Lets talk about how many people that have been phyiscally burned! I have a lawsuit for severe burns done to me. Burns which will stay with me forever.WHAT A HORRIFYING EXPERIENCE! I hate Sona Med for doing this to me! I would like to learn how many others there have also been severly burned.

I too was SEVERELY burned 2 times by Sona. The nurses were horrified when they saw the pictures i brought in! It was horrible pain! They promised they would take care of the burns once time had passed and they healed enough.Now their doors have closed (Sacramento) and not only have i had no treatments to address the burns but i also had about $1500 worth of laser that still has not been done! Someone has to be responsible for the negligence and ripping all of us off who are out a lot of money and have been physically damaged by their lack of knowledge aboutthe lasers. Please,i need help to know what to do next. I have never sought recourse before so this is all new to me!

11.17 | Unregistered CommenterCB

The sickining part of all of this is that the Sacramento Sona held an open house in mid November for the new services they were offering and closed their doors the next week. Surley they knew that they were not going to be around.

My e-mail is kindsouljoon@yahoo.com

Please send me information on the law firms and resources out there that I can contact for my loss now that the Sona Med Spa in Sacramento has closed.

11.30 | Unregistered CommenterPT

I too was burned by Randy Denning and his crew at Sona Sacramento. I'm headed to court in 2 hours, and I know I'll need help on going after this idiot to get my money back. Any info you can provide will be greatly appreciated!! Monica11052003@yahoo.com

02.20 | Unregistered CommenterMonica

Another Sona Medspa just filed chapter 727 leaving customers who were required to pay for services in full, upfront with many unanswered questions and treatment in limbo. The office of Coral Gables, FL closed its doors without notice on March 6, 2008. What options are available to recuperate our losses for services not rendered?

03.31 | Unregistered CommenterDB

I have started a med spa after being in health care for 30 years and I am experiencing alot of satisfaction in the advanced skin care treatments such as the laser photofacial for age spots, the red vein removal, cellulite laser treatments and the botox and dermal filler service. As a baby boomer I can experience these services and can see the results. I want to know the details of what laser burned these people and what service they wanted and was a test spot provided for the client? I want to know if small multiple packages would be a better offering for the client and a better way to budget for the med spa?

04.6 | Unregistered CommenterNPmedspa

NP Medspa: The "burns" you are hearing about are generally caused by inexperienced practitioners (oftentimes persons wioth zero medical credentials and poor/inadequate training) utilizing IPL or lower wavelength lasers without appropriate test spots before treatment. They also generally occur with patients who have some level of tan and should not even be treated with the equipment being used. It is not a good idea to treat anyone who has been tanning within the past 60 days with any device other than lasers utilizing the 1064 nm wavelength.

Many med spas are selling "packages" and that is OK but the income should not be treated as "real" until the treatments have actually been delivered. Up to that point the pre-paid dollars should really be treated as funds being held "in escrow". Patients should also be told that after using up their packages they still may need additional treatments for their satisfaction, etc.

I also spent a lot of money on packages that were not completed with very very very poor results. Has anyone filed a class action lawsuit yet? If so, I'm IN!!!

04.12 | Unregistered CommenterKairosgirl

Curious.

I have been a patient of Pure Med Spa (Pure Laser Hair Removal & Treatment Clinic) for laser hair removal for months and have had a shockingly poor experience with their management and technicians and their services. My calls to the new CEO Bill Korner (416-408-0305 ext. 110 in Toronto or 770-475-1300 in Georgia at Sedona Med Spas) and others in their head office in Toronto are not returned, requests for a refund have not been granted, they continuously break commitments made to me with respect to my treatments and requests for my treatment log, I have been quite badly burned by their lasers on a few occasions. I was told they have been going through a "restructuring" which includes changes to top management, location managers and technicians and are trying to improve. But I have not seen any evidence of the improvement thus far. I'm curious to know if anyone has already, or is thinking about launching a class action lawsuit against Pure Med Spa in the U.S. or Canada.

Thank you.

04.21 | Unregistered CommenterLance

Help, in regards to Pure Med Spa, Once again after 4 calls to get an appointment, i drove 25 minumtes to be told i was not scheduled and Oh by the way they have changed machines...from IP Photo to syneron "elos" and that i would need to restart with 5 treatments to see results.... 1.Is this the same treatment as IP Photo? 2. Any advice on getting a refund on my final 3 treatments? I have experieced all the complaints Lance stated, and will call the CEO on Monday, Thanks Cecelia

06.22 | Unregistered CommenterCecelia

Is there any way of getting my money back for the services I recieved in Utah? I had 2 treatments and went in for the third to see a closed sign on the window. I know its been along time ago but I have all the documentation to prove purchace and services. Please help.

Clayton

You can try Civil Court. If you do sue for all court related fees also. Also try state dept of health. Usually they will not get involved in fee disputes, but they may have some helpful info.

06.22 | Unregistered CommenterFlorida PA

I work at Laser for Less which is family owned, we have 3 locations and pride ourselves in realistic expectations, skin types 1,2 should expect 6-8 treatments with 1-2 times a year touch ups, skin type 3 should expect 7-9 full sessions with the same 1-2 times a year touch ups with our 755nm Alex laser, and skin types 4-6 should only be treated with a YAG 1064nm laser and will need 10-16 full sessions with 2-4 touch ups a year. I think that the risk of being burned is always a possibility and both the client's responsibility to avoid sun and tanning and the company's responsibility to educate proper protocol. For those who have been shut out but want to continue treatment, come visit laser for less where you CAN pay as you go. For those who have been physically burned... do not treat that area until it is completely healed. and Good luck, I wish every company was honest and real, but I think at least we are.

06.29 | Unregistered Commenterlaser tech

Can anybody email me the information of lawyers involved in the class action lawsuit against Sona (Miami-Coral Gables)? I had to stop treatment and was never notified of the closing. Now, that I want to resume, they're out of business. If you have any information please email me at klopez815@yahoo.com Thanks.

07.22 | Unregistered CommenterKL

KL: I am not aware that there was ever a class action law suit against Sona or any other med spa franchise.

07.22 | Unregistered Commentermedspa guy

Does anyone know anything about why Pure Med Spa is closing locations around the country. I am a patient and went in for my treatment to the San Francisco location and they had vacated the location with out notifying me.

I spoke to their Customer Service person at Pure Med Spa this week who was very nice and helpful.
She explained that various locations around the country were closing but they were going to honor all of my services at any other Pure Med Spa that I would like to swiitch to!
The women helped me get my new appointment set up also.
No complaints here...

You can also look up NUVO SKIN International which is now Pure Medspa. It will be very difficult to find any board certified physicians in any of these Mall type boutiques or any of them performing the procedures. Good luck to any people going there.

11.8 | Unregistered Commentercali

Is anyone aware of any financial relief for (pre-paid) patients of the former Sona Medical Spa in Sacramento?

03.16 | Unregistered CommenterAuburnite

@ Sona Med Spa Patient,
I'm afraid that once the med spa franchise goes out of business you're at the very end of a very long line in looking for money back. If you can prove that the med spa owner took you payment knowing that they were about to go under you may be able to go after them personally. Unless you're spending thousands of dollars on a laser hair removal series or Thermage, I'm afraid your best option is to take the loss. Sorry it's not better news. Laser Clinic MD

Lance,

I'm from Canada....I was badly burned from a treatment. I took the company to court....it took about 2.5 years..and they settled.

07.9 | Unregistered CommenterM.

I went to the Sona Med Spa near Denver, Colorado. It was happy until they said their laser machine was out for repair and they would need to reschedule my appointment. Several months went by and they still did not have the machine back. I asked for a refund of the package I purchased, but they "sweetly" said they were not allowed to give refunds. I called a week later and they were gone-closed up-out of business. I called my Visa credit card company and filed a dispute for the amount of the package. (I think it was under 200.00) Since I had purchased the package at Sona Med Spa only 60-90 days prior, Visa immediately credited me and that was that. This was in early 2009.

08.12 | Unregistered CommenterSue

Gee, I see that I am not alone. Today April 12. 2010. So this iis a current post....I went in last week to the mall at Vally fair in San Jose and and sure as shit it was closed. i recalled about 2 weeks ago when I was getting facial the girl told me to get all my procedures right away because she heard that something was amiss. When I walked out all the girls at the front counter were not their bright a cheery selves...which tells me that they knew something was up.
I really wish these girls who knew what was going down would have told their customers, or at least got them to schedule appointments soon,,,,,,,these girls knew yet they did not disclose...
I guess they did not want to let the cat out of the bag... Too bad cause now they look just a guilty as the owners... like every one was trying to keep the secret. Listen if u work for a company and u kmnow they are doing wrong... then get the hell out and go work somewhere else. Obviously, the work ethic was not there.. tooo bad for the employees cause this makes them look reallllllllls bad..just sayin...

04.13 | Unregistered Commentertreeis

I went to a chemical peel on February 26 2013 for the 3rd treatment n came out of there 10 min later with second degree burns in my face n lots of pain. At Sona medspa in Hunterville they looked scared n my husband was in shocked to see me. They provided zero help or a dermat. I hv spent lots of money, time trying to get my skin on face to look healthy again but stains left from burn are still there looks like Melasma but its not...plus I can't exposed my self to sun at all. The attorney today is saying they are fighting back saying they think I had d Obagi products they recommended on face therefor the burns. Very disappointed to think they have a chance to continue open when they are careless and cold about what they did to me. Please email !e the information of the attorneys envolved in cases with Sons Med spa....I'm thinking in taking this with pictures to local news and to state attorney. Advise needed before going to court. Shollrodriguez@yahoo.com.com ...thank you!

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