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Dermacare Medspas Lawsuit: Franchise Reaction

authority.jpgSince Dermacare (it's  CEO Carl Mudd) has decided to sue the Dermacare Franchisees who have commented or communicated on Medical Spa MD, there have been a number of comments asking about what the status is.

There have been a number of comments describing this lawsuit and the demand to find out who everyone is as an act of complete desperation. I myself can not see it as being in any way positive for Dermacare. I'm assuming that most if not all of the individuals that Carl Mudd is looking to identify are working for Dermacare or a Dermacare Franchise. I can't see that Dermacare suing all of it's franchises is something that it could possibly recover from since, if the commenters are correct, Dermacare hasn't sold a new franchise in more than a year. (Dermacare's UFOC will have to reflect any clinic closings and it's financials.) If there are any happy franchiesses they're more than welcome to comment as well.

It seems likely that this is the beginning of the end for Dermacare.

Take a very best case for Carl Mudd: He sues the Dermacare franchises and wins some sort of settlement or they settle. How will he possibly sell another franchise ever. He can't. Who would want to take the same chance.

Of course I'm just thinking out loud. It seems that Mr. Mudd is caught on the horns of a dilemma. Dermacare can suffer the death of 10,000 cuts, with franchisees speaking out and warning away potential new sales, or... Mr. Mudd's best be personally (since he eveidently owns 100% of Dermacare) is to sue the current franchisees and see what he can get before walking away.

If Mr. Mudd has chosen to sue everyone, there's really nothing you can do about that except defend yourself. I'm guessing that if franchisees are actually served, there will be a counter-suite tuite suite. Mr. Mudd may find out that simmering anger turns the horns of the bull from a quandry into a real battle. It would seem that there are plenty of former Dermacare corporate employees who have no love lost for Carl Mudd.

Carl Mudd and Dermacare may have bitten off more than it can chew.

Reader Comments (12)

I represent 19 Dermacare Franchisees who have gone backrupt or have been terminated by Mr. Mudd. At Dermacare's Apex there were 32 Clinics. There are now 22. Fully 60% of Dermacare's Franchisees have gone bankrupt or been terminated.

Mr. Mudd is either a pathological liar or he lives in a dream world. He is either crazy (detached from reality) or he is evil and bad.

For those of us caught in the Dermacare Nightmare, we are ready to fight to the death. There will be no settlement. There will be no further Dermacare Franchise sales (if we can help it). We are mortal enemies. We fight to get even and we fight to protect other naive doctors who may consider Dermacare is a business vehicle.

We are tireless. We will outlast, outwit and outplay Mr. Mudd.

Accordingly, this master regional clinic is going to made part of Dermacare Corporate, here on referred to as Corporate North . . . It is expected that with the University of Florida academic relationship, that the Gainesville MRF franchise of Dr. Phillip & Charley Barkley, the largest MRF in the U.S. and the Research triangle franchise of the Keverlines will also become more than Regional Training Centers, and also be involved in the corporate structure.

We have the best trade name in the industry. We have the best system in the industry. We have the best franchisee success rate in the industry. We have the best reputation in the industry.

---Carl Mudd, State of the Franchise-January 20008.

60% Clinic Failure Rate! What is Carl Smoking?

Dear Drs. Smith, Barkley and Keverline,

You now know about the 60% Dermacare Clinic Failure Rate. Is Carl delusional or is he knowingly misleading people (including current franchisees)?

Your support and your testimonials legitimize this opportunity and make Mr. Mudd’s false and outrageous claims believable and credible. You have a moral and a professional obligation NOT to mislead and entrap your fellow physicians in this losing proposition.

We know you have invested a lot of time and money into your Dermacare Clinics and your territories. It is hard to walk away. This is what we suggest you consider.

Form a group and break away from Mr. Mudd. Mr. Mudd is the problem. He is the cancer. He is what makes Dermacare a losing proposition. Once you are rid of Mr. Mudd, correct the problems with Dermacare and continue to recruit and sell. We don’t have a problem with the three of you. We have a major problem with Mr. Mudd because we know he will continue to propagate current problems while will lead to clinic bankrupsies, terminations and financial ruin of franchisees.

Will he stab you in the back one day? Just talk to Dr. Patel and Dr. Moffo. They were his “go-to” doctors in the beginning. They were his best friends. He probably said about them:

3 of the finest individuals on earth, who have more character, charity, and empathy in their little finger---Carl Mudd. Blog Entertaiment coming to a Close. 1-22-08.

Now Dr. Patel is suing Carl because Carl did not pay Dr. Patel for his clinic and did not pay the laser leases ruining Dr. Patel’s credit. Dr. Moffo hates Carl because Carl is an asshole. We have an exchange of emails which document their disagreement. (By the way, Carl really seems like a total ass). The Doctors Moffo and Dr. Patel did so much for Carl Mudd and Dermacare and then he screwed them without a second thought. He has a very short memory when you have done things for him. Talk to these men. Mr. Mudd WILL screw you at some point in the future. Count on it. He did it to Dr. Patel and to Dr. Moffo.

More importantly you will be linked and enjoined in all the coming law suits against Mr. Mudd and Dermacare. There is lots of liability associated with 19 failed clinics. In addition there are angry and wronged vendors, attorneys and ex-employees. Are you sure you want to take on Carl’s problems?

If you stay with Mr. Mudd you will be held accountable by us, by the people you help recruit and by your god and your maker. Think about it.

All of us “Carl Haters” are communicating with each other. A pretty clear picture of Carl is emerging. A movement is growing. Dermacare is doomed if Carl Mudd stays involved. “You live by the Sword . . . You die by the Sword”. Mr. Mudd has made his bed and now he has to lie in it.

Think long and hard about becoming Dermacare North and Dermacare South. It is NOT a good idea. Helping Mr. Mudd IS NOT a good idea. He will use you and then discard you. It is not the right thing to do. It is wrong. Very wrong. You will feel very bad about all the new prospects you bring to this evil man and his losing proposition (if any are naïve enough to join in the first place).


The Alliance and the Merry Pranksters

Oh good, I've been included in the lawsuit because I think Carl is a jerk and I think he deserves whatever happens to him.

Awesome, if it goes any further I can talk about why I've developed the opinion--due to being FIRED within weeks of my husband being in a serious car accident and lying in ICU in a coma with a 10% chance to live due to a diffuse anoxal traumatic brain injury. Checking my emails and fielding phone calls and working in the evenings weren't enough for him while the fate of my husband and 5-month old child's father hung in the balance.

I suppose I should think he is a saint! I think his lawyer(s) will be in for a nice surprise to learn the person he really is when they start getting to the meat of their newest project. My experiences are just the tip of the iceberg from what I saw while working at Dermacare and from the things I heard.

01.29 | Unregistered CommenterJennifer D

Jennifer D-
I'm so sorry to hear that you are being included in this mess after what you've been through. I hope your husband is recovering well and don't worry, there is more pressure on Carl than on us.

When you have a moment, can you let us know which lawsuit?

01.30 | Unregistered CommenterDermaDoc

A chip off the old block??? You be the judge!!!

Yes he is smoking lots of drugs!!! I've seen it! He comes into work high. No wonder he's ssooo dumb. He trys to make "he's moves" on all the female staff (sick doesn't he know he's ugly). The only person that gave him any attention is Laura and she is a head case herself. Think about it - what real woman would work for him for years!!!Can we say Gold-Digger? doesn't she know there's no gold?? He's a joke to anyone who knows him around town. He has at least 5 cases filed against him from his female former employees. anyone who listens to a word this "man" says after being warned about him by so many people is no better then him!

Laughing hysterically. It is so great to read this. I always knew that Carl Mudd would one day get what he deserves. Karma is a beautiful thing. I was one of Dermacare's laser reps for a brief period until it came time for Carl to pay the bill for the delivered equipment that his spa owners really wanted. Carl, refused to pay unless he was guaranteed kickbacks for this and future laser sales into his clinics. We refused and repossessed the equipment. This caused me to loose thousands of dollars in commissions.

Carl is getting everything he deserves and truly personifies the old saying "his name is Mudd," which came from when Dr. Samuel Mudd unknowingly treated John Wilks Booth after he shot President Lincoln. Carl knowingly tries to screw or swindle everyone he meets and for that, he has earned a lifetime of misery.

Arizona District Court Bankrupcy case no.:2:08-bk-11021-EWK
chapter 11
filed : 8/22/08

Is there something actually going on with the attorney or will he drop the case when Carl doesn't pay him like all the others? I saw the email about rumors of letters going to franchisees - is everyone getting this letter? Anyone know anything?

09.18 | Unregistered CommenterDermaDoc


I am not sure how the Bankruptcy fees work. I know a filing fee is required, but as far as the arrangement w/ the attorney and Carl not sure. I would have to think the attorney who is filing and handling the bankruptcy for the client knows his chances of getting much from that client as far as dollars would be very slim.

I would tend to think the attorney would require the majority of the payment up front since his client is filing bankruptcy and since the client has no or is saying he has no money.

I do know after speaking with various attorney's the franchisees that have been terminated and left the Dermacare system are much better off than the one's that just remained Dermacare and waited for Carl to go under. In essence the one's that remained and still remain Dermacare are still part of Dermacare even though as it appears DLC Dermacare, LLC no longer exists.


09.18 | Unregistered CommenterSBJ


I hear what you are saying about the ones who left being better off, but in most of those cases, there is a considerable risk of being sued for breach, if they aren't being sued already, even though they probably have great cause for countersuing Carl Those who stay are possibly on the hook for royalies until their contract is up in however many months or years, but again, many of them have valid countersuits against Carl. I think the path a specific franchisee took was as much dependent on emotional response to the BS going on as it was a business decision. I know I went through the gamut of anger, fear, rationalization, bargaining, etc and finally settled pretty comfortably on loathing. I disagree the 'outed' franchisees are 'much better off'. If Carl gets up some momentum, we all know he holds a grudge and will go after any and all who he perceives has sullied the good name of Dermacare or Carl Mudd. There is risk either way, it is just a mattter of whether you want to pay an attorney now or later. I can surely acknowledge that I would be absolutely nauseated at the prospect of paying royalties to that megalomaniac, so I won't. And i do fully expect the bankruptcy case to be dismissed once the hearings take place as much of his debt is due to judgements levied due to fraud and illegal (or at least highly unethical) business practices. And I daresay there are probably more than enough co-defendants willing to testify against him if they think he is leaving themout to dry for the judgements. I see it as a very desperate, very dimly thought out last resort plan to pull his butt out of a fire even he didn't see coming. And good on the attorney, Mr. Hendrickson, for taking Carl's money in a case he probably is not expecting much success on.

09.18 | Unregistered CommenterDermaDoc

Interesting stuff here guys. You're absolutely right in that the franchisor will have to disclose the litigation which renders his future efforts (as well as his current) far from repair.

I was an extremely large and profitable personal services franchisor as well as I also owned dozens of company owned franchised locations as well so I do "get it" and even way beyond what most could ever imagine. My personal advertising budget was in the tens of millions annually and I think that I have a pretty good feel for your industry. Your comments on this site seem to be well founded but very confusing as why would anyone ever destroy his own creation especially since it was producing revenue for so many (or was it) ??

I am pretty sure that everyone is aware that Dermacare really cannot legally stop any advertising or promotion for any franchised location during this litigation, right ?? Why then are the franchisees that are operating out there under Dermacare filing for bankruptcy ?? Is it in defense of the litigation ?? Do you need marketing help, better advertising creation, what is really going on ?? This business is way to profitable for anyone to be having financial issues with it.

Today is July 14th and I bet that within two (2) months I can create a laser organization that will put Dermacare, Sona or most of these others to shame so stay tuned and good luck to all of you guys.

Sheesh, almost sounds worse then my divorce which has been in litigation for over three (3) years now as well. :(

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