Dady & Gardner Wins Landmark Case Against Sona MedSpa And Its Investors
Atlanta – April, 2007 – An arbitrator in Atlanta, Georgia awarded nearly $400,000 to a franchisee who was duped into buying a Sona MedSpa franchise on the basis of “faulty” information about Sona’s hair-removal services. The arbitrator not only held liable the Nashville-based franchisor, Sona MedSpas, and its founder, Dennis Jones, but also a group of prominent investors that acquired the franchisor, but then failed to correct the misleading information. The investors included Carousel Capital of Charlotte, N.C., its Chairman, Nelson Schwab II, Jim Amos, former President of Mail Boxes, Etc., and his daughter, Heather Rose. As a result of the investors’ failure to act on the information, the franchisee not only proceeded with his investment, but also repeated the faulty information to its own clients.
“The case is the first of its kind to hold that investors in a franchise company are liable to a franchisee for failing to perform adequate due diligence and to take corrective measures once they discover the fraud,” said, attorney for the former franchisee of Sona MedSpa, Kempton J. Coady.
In the past two years, 17 of 45 Sona franchisees have gone out of business, changed hands or left the system. At one point, a total of nine (9) litigations or arbitrations were or are pending against Sona for medical or business fraud.