A group of Amazing Lash Studio franchisees has formed an independent association and is calling for "new executive leadership and infrastructure, including removing predatory business practices and overhauling company culture," they said in a press release sent to Franchise Times but not yet released to the public.
"The rampant price gouging, the elimination of vital resources and the blatant retaliation against franchisees don’t represent the corporate values that existed when we bought into the company as franchise owners," the release said. "We must advocate for meaningful change to save our businesses. Our studios represent our American Dream, and now our dreams are at risk.”
The group is called The Franchise Alliance Inc., formed within the last "three to six months" and organized by the law firm they retained, Zarco Einhorn Salkowski of Miami, named partner Robert Einhorn said in an interview this week.
"We've done some work for some individual franchisees, and that led to a formation of the association," which was formed as a private group, not one listed on the American Association of Franchisees & Dealers or other platforms, Einhorn said.
He did not cite the number of members in the association but said "they're in growth mode." The group is "very upset with the brand, particularly with respect to the supply chain," he said.
"What highlighted things for franchisees was COVID," during which Amazing Lash was "unable to provide product to franchisees, and franchisees went out and sourced products on their own," with tacit approval from corporate, he said.
"The franchisees came to learn they were able to source higher quality product at a small fraction of the price," that Amazing Lash was providing and charging them for.
"The markup on the lash product was about 500 to 800 percent," said Brenda Phang, another Zarco law firm attorney representing the association.
Amazing Lash Studio is a division of WellBiz Brands, owned by KSL Capital Partners and based in Denver. Jeremy Morgan was named CEO of WellBiz in June 2019. Stephanie Hu was named CEO of Amazing Lash Studio in October 2020 but left a year later; Morgan is in charge of the brand.
A request to interview Morgan or another executive was declined. WellBiz sent a statement saying, "At the Amazing Lash Studio brand, supporting franchise owners and their efforts to provide the high-quality services and unmatched guest experience customers expect is a top priority.
"The Amazing Lash Studio brand and its Support Center provide a number of meaningful resources and subject matter experts who assist franchisees across key functions—including digital marketing, membership, stylist recruiting and training, and technology—while ensuring franchisees have access to approved suppliers that provide affordable products that meet the brand’s stringent quality, safety, and sourcing requirements.
"The Support Center takes great pride in the growth of the Amazing Lash Studio brand and the world-class support provided to franchise owners."
Read here about WellBiz Brands growth and challenges during COVID-19.
Einhorn said he was not authorized to speak further on behalf of The Franchise Alliance, and members will not speak on the record because they fear retaliation. "The bullying has been going on even before we got involved," with studio owners who spoke out threatened with closure, he said.
"The challenge here, for us and for you, is that the franchisees are desperately worried about retaliation," Einhorn said. He is "not authorized" to name the leadership of the group, and he does not know which members of the executive team the group seeks to replace.
Einhorn added there is "disagreement among the group" even about putting out the press release sent to Franchise Times, and over its content.
The press release says in part:
Franchise owners of Amazing Lash Studio "are sounding the alarm on the company’s predatory business practices, including a more than 500 percent markup on inventory," it said.
"The group of ALS franchise owners are calling for corporate accountability to prevent a mass exodus from the brand that saw $600 million in systemwide sales, and awarded nearly 150 franchise licenses opening locations in 20 new markets in 2022."
This story was updated with Stephanie Hu's status; the former CEO of Amazing Lash Studio left in October 2021.