Category Archives: NEWS

LA Weight Loss Charlotte Franchisee Sheds Unwanted Members, Employees

According to a story on WCNC, Charlotte, NC LA Weight Loss franchise owner Rick Rex has shed those unwanted customers and employees by abruptly closing his weight loss centers. Last Friday, all 10 Charlotte, NC area LA Weight Loss centers closed without notice.
Employees, some of whom had worked at LA Weight Loss for years, were given no notice, no severance and will be paid through the end of the week they worked.
Some LA weight Loss members have are owed thousands of dollars in products and services. The owner does not return calls, and the Better Business Bureau has been unable to track him down.

Former LA Weight Loss Loses $20M EEOC Suit

FranchisePick.com reports that the EEOC has won a $20 Million discrimination lawsuit against Pure Weight Loss (formerly LA Weight Loss) despite the fact the company went into bankruptcy in January, 2008 (see The EEOC Celebrates $20M Victory Over Non-Existent Company)

In a nutshell, the EEOC has won $20 million and other “significant relief” on behalf of workers who were never hired by Pure Weight Loss (formerly LA Weight Loss), which closed its 400 locations earlier this year.  Thanks to this landmark victory by the EEOC, the male employees who were never hired will be entitled to $16 million in back pay for work they never performed, and will now be offered positions in the company that no longer exists.

The EEOC becomes Creditor #100,001.

The closing of Pure Weight Loss (formerly LA Weight Loss) left thousands of customers cheated out of prepaid services and left employees nationwide jobless.  With more than 100,000 creditors and liabilities at $10 million to $50 million, Pure Weight Loss filed for Chapter 7 bankruptcy.  Shortly thereafter, the Attorney General of PA sued for fraud and moved to seize both corporate and personal assets of the company and its founder, Vahan Karian.

According to the EEOC, Pure Weight Loss discriminated against male applicants, having denied them the same opportunity to receive pre-Christmas pink slips and bounced paychecks like their female cohorts.  In its battle against employment injustice, the EEOC is not fazed by a small obstacle such as the non-existence of the employer.

Did Pure Weight Loss Close Because of the EEOC?

The EEOC originally sued L.A. Weight Loss Centers, Inc. (LAWL) in February 2002 under Title VII of the 1964 Civil Rights Act,  alleging that the company “engaged in a pattern or practice of disparate treatment against men in its recruiting, hiring, and assignment of employees.”  On September 6, 2007, an EEOC press release announced “A federal court has ruled that the U.S. Equal Employment Opportunity Commission (EEOC) may proceed to trial with its class sex discrimination lawsuit against L.A. Weight Loss Centers, Inc. (LAWL) on behalf of qualified male applicants nationwide.”

The judge’s decisive rejection of LAWL’s motions to dismiss the case indicated that the EEOC case, which included “discriminatory admissions by various high-level LAWL officials,” was strong.

Three months later, Pure Weight Loss announced it was closing all 400 centers nationwide and laying off all employees, male and female.

Could it be that Vahan Karian’s LA Weight Loss knew this judgement was coming all along, and decided to change its name to Pure Weight Loss and shut down all its center shortly thereafter because it knew the EEOC was going to win?

There’s more to this story than meets the eye.

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Pure Weight Loss to Pay $700,000 to Former Members

Here is the press release issued by the office of PA Attorney General Tom Corbett December 12, 2008:

Attorney General Corbett announces $700,000 consumer protection agreement with Pure Weight Loss Inc.
HARRISBURG – Attorney General Tom Corbett today announced a more than $700,000 consumer protection agreement with Pennsylvania-based Pure Weight Loss Inc. addressing more than 3,500 complaints involving non-delivery of weight loss products or services to consumers from Pennsylvania and several other states.

Corbett said a consent decree has been reached with Pure Weight Loss, Inc., of Horsham, PA (formerly known as L.A. Weight Loss Centers, Inc.), along with the company’s owner and president, Vahan Karian.

Corbett said the agreement requires the payment of $500,000 to the Pennsylvania Office of Attorney General, for distribution to consumers who pre-paid for products and services that were not delivered and who filed valid complaints with the Attorney General’s Health Care Section.

Additionally, the agreement sets aside $200,000 in a secure fund, which will be used to provide restitution to consumers who filed claims in the U.S. Bankruptcy Court case involving Pure Weight Loss. Corbett said this money will be turned over to the Bankruptcy Trustee for distribution to consumers who have filed proofs of claim with the bankruptcy court.

Corbett explained that the Attorney General’s Health Care Section began receiving complaints about Pure Weight Loss in December 2007, shortly after the company announced plans to close more than 400 weight loss centers across the country. The company halted operations on January 4th, 2008, and filed for bankruptcy shortly after that, leaving thousands of consumers without access to weight loss products and services that they had pre-purchased.

Corbett said that the majority of the consumers who contacted the Attorney General’s Office had purchased contracts lasting a year or more, paying as much as $2,000 for “lite bars” and other food items that were never delivered. Following the closure announcement in December 2007, consumers were instructed by Pure Weight Loss to pick up products from their stores prior to January 4, 2008, or file a claim for refunds – but many consumers failed to receive either refunds or the products and services they had purchased.

Corbett said that in addition to the $700,000 payment from Karian and Pure Weight Loss to fund consumer restitution, the Pennsylvania Office of Attorney General is also working with authorities from the states of New York and Maryland to recover additional funds for consumers from those states.

Both New York and Maryland require weight loss centers to post security bonds intended to protect consumers against losses, and all complaints involving consumers from those states will be turned over to authorities in New York and Maryland as claims against those security bonds – allowing the remaining funds to be distributed to consumers from Pennsylvania and other states.

Corbett said that efforts are underway to verify all the consumer claims that have been filed with the Attorney General’s Health Care Section. Bank and credit card records are also being obtained to determine the exact amount of credit card charge-backs, stop-payment orders or partial refunds that may already have been paid to some consumers. Corbett said the final distribution amount for each consumer will be calculated when the review of that financial information is complete.

It is anticipated that partial refund distribution will begin in early 2009 for eligible consumers who have already filed complaints with the Attorney General’s Health Care Section.

Refund distribution for consumers who filed proofs of claim with the U.S. Bankruptcy Court will take place at the conclusion of the bankruptcy case involving Pure Weight Loss.

The consent agreement was filed in Commonwealth Court, in Harrisburg, Pennsylvania, by Deputy Attorney General Timothy E. Gates of the Attorney General’s Health Care Section.

LA Weight Loss Centers Close in Charlotte, NC

LA Weight Loss Centers in Charlotte, NC closed abruptly this week, leaving some customers owed hundreds of dollars.

According to the Charlotte Observer:

Tom Bartholomy, president of the Better Business Bureau of the Southern Piedmont, said his office started receiving calls this morning about the closures. The owner of the Charlotte-area centers, which are operated as a franchise, could not immediately be reached.

This morning, a sign posted on the door of the LA Weight Loss Center on Baxter Street near uptown Charlotte read: “Due to the current economic conditions and the notice from our Franchisor that they are ceasing operations we have no choice but to close our Charlotte and surrounding area centers.”

It said the company would contact as many of its clients as possible “to deliver the products owed to you,” and left an email address, customerservice@laweightlossnc.com.

In a recent comment left here, Kelly Clark, who says she is a former employee, reports:

Update on LA Weight Loss NC Franchise The following centers will be closing effective 12/11/08.

Rock Hill, SC
Hickory, NC
Pineville, NC
Mooresville, NC
Gastonia, NC
University, NC
Uptown, NC
Huntersville, NC

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Closing Canadian L.A. Weight Loss Offering Members “LA on the Go” Phone Counseling

According to the Chronicle Herald, all the L.A. Weight Loss Atlantic Canadian franchise centers are closing Dec. 5, 2008.  Instead, they will offer a phone-counseling service called “LA on the Go” to their stranded members.  According to the Chronicle-Herald:

David Shneer, president and CEO of LAWL Maritimes Inc., said in an email Tuesday that the company, which operates LA Weight Loss Centres in Halifax, Dartmouth, Bedford and Sydney, is changing its business model. “Over the weekend, we decided for two main reasons that we cannot continue to operate the centre-based business,” he said. “So we have informed our centres that we are going to close.”

*  *  *  *  *  *  *

Mr. Shneer… said LA Weight Loss clients have the option of continuing with the company’s LA On the Go program or requesting a refund. The LA On the Go program was designed for clients who could not visit the centres, he said. “It provides them with weekly one-on-one counselling but just over the phone instead of in the centre,” he said. “They also still have the same access to optional products.”

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L.A. Weight Loss Atlantic Canadian Franchises to Close

According to the CBC News, all the L.A. Weight Loss Atlantic Canadian franchises will be closing Dec. 5, 2008.

There are a total of nine L.A. Weight Loss franchises in Atlantic Canada, and all will be closing their doors for good on Dec. 5, putting about 40 people out of work.  According to the report:

“Franchise owner David Shneer told CBC News Tuesday that things have been tough for a while, but the ongoing global economic crisis has made it impossible to stay in business.

“He added that many consumers do not think weight loss is a necessity when times are tough.

“Clients who enrolled for longer-range programs can obtain refunds, he said.

“Pennsylvania-based L.A. Weight Loss has seen other franchises close over the past month, including operations in Oregon, Montana and Wisconsin.”

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LA WEIGHT LOSS: More Wisconsin LA Weight Loss Centers Closing

The widespread closings of LA Weight Loss centers continue in Wisconsin, as elsewhere. The local Inches-A-Weigh franchise is offering a discount to LA Weight Loss members left stranded by the closings. According to the Appleton Post-Crescent:
“LA Weight Loss will close its two locations here next Wednesday. They are at 1005 Mutual Way in Grand Chute, near Wal-Mart and N474 Eisenhower Drive, Buchanan, near Regal Cinemas. Both opened in 2004. In a written statement, the company cited “economic conditions in our country at this time” as the reason for closure. The company will contact current clients and offer them phone counseling or a refund.

“Another women’s weight loss business, Inches-A-Weigh at 4774 Integrity Way, Grand Chute, will give a discount to anyone with unexpired LA Weight Loss contracts, said co-owner Dave Murphy.”

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LA Weight Loss Centers Closing in Milwaukee, WI

L.A. Weight Loss is closing all of its Milwaukee, WI locations according to the WITI-TV Milwaukee:

“Another sign of the times – a national franchise is closing all six of its Milwaukee area locations. This time, it’s LA Weight Loss that’s tightening its belt, leaving a lot of unhappy customers.”

Other recent closings include:

LA Weight Loss Center Closing in Eau Claire, Wisconsin

LA Weight Loss Centers Closing in Rochester, Minnesota

LA Weight Loss Centers Closing in Portland, OR

LA Weight Loss Center Closes in Great Falls, MT

LA Weight Loss Centers Closing in Raleigh, N.C.

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LA Weight Loss Centers Closing in Raleigh, N.C.

L.A. Weight Loss just announced it’s closing in Raleigh, N.C., according to the News & Observer:

“The LA Weight Loss centers at 6675 Falls of Neuse Road in Raleigh and 163 SE Cary Parkway will close in mid-November.

“Company spokeswoman Jackie Zima said the closures were due to ‘economic conditions in our country at this time.’

“The centers are notifying members, she said. … In Durham Jenny Craig opened a new center at 8128 Renaissance Parkway.”

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LA Weight Loss Centers Closing in Rochester, Minnesota

L.A. Weight Loss just announced its closing in Rochester, Minnesota center, according to the Post-bulletin:

“L.A. center to close

L.A. Weight Loss is trimming from its corporate waistline and that means Rochester’s center will close soon.

Current members will still receive the full program, the company said. “We are servicing out all of our clients. We’re not just closing our doors,” said spokeswoman Jackie Zima. “We’re there through the end of the year.”

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