Laser Clinics' UK franchisees exited for £1 while customers lost pre-paid treatments

Laser Clinics opened in Australia in 2008 as a franchise network founded by former actuary Babak Moini and legal IT expert Alistair Champion, and grew into more than 200 clinics offering laser hair removal, injectables and other non-surgical cosmetic treatments — over 100 in Australia, 20 in New Zealand, 50 in the UK and seven in Canada, with its Asian clinics gone from the website just years after expanding there. KKR bought the business in 2017 and pushed it global, entering the UK in 2019.

The trouble surfaced early. In 2021, 52 franchised clinics sent a legal letter alleging they were being gouged on equipment and supplies and hurt by aggressive head-office discounting; KKR settled by buying out most of the 52. By 2024 the UK network was closing stores with little notice, leaving customers who had pre-paid for treatment without refunds — some told they could not get their money back or directed to a clinic an hour away, as the BBC's Watchdog put it on national television on May 8.

In February 2024, franchisees sent another legal letter claiming head office misrepresented the financial outlook, understated operating costs such as staffing, and fixed prices in ways that made clinics loss-making. The exit terms tell the story: UK franchisees were offered buy-backs of one pound — walk away relieved of main debts and personal guarantees, but possibly still tens of thousands of pounds down and still liable for laser machines bought on finance. Four had accepted by the time of reporting.

Franchisees describe 15-to-17-hour days without head-office support, and say private equity's three-to-seven-year horizon means decisions are made on numbers rather than partnerships. Laser Clinics said it was re-opening and investing in UK clinics and that franchisees are 'front and centre' of its plan.

Head office controlled prices, discounts and supplies, so franchisees carried the fixed costs while the franchisor captured the margin.

Clinics were sold on projections that buyers say understated staffing and operating costs, saddling them with loss-making operations from day one.

Closing UK stores without refunding pre-paid customers broke the brand's promise in public, on national television, speeding the flight of both customers and franchisees.

A franchisor that controls pricing, supplies and discounting owns the franchisees' losses too — squeezing the network is squeezing the brand.

Some franchisees are threatening legal action and others say they cannot find buyers to exit the network. The material reports Singapore had already gone and Canada was struggling; it warns that continued 'business as usual' could leave KKR holding an asset with limited appeal.