ATLANTA, GA—Attorney General Chris Carr today announced that his office has reached a settlement with Derobis Enterprises, LLC and Beauty Supply Institute, LLC in response to allegations that the companies violated the Sale of Business Opportunities Act and the Fair Business Practices Act. 

“We will continue to protect Georgia consumers and small business owners by holding accountable companies that engages in unfair and unlawful practices,” said Attorney General Carr.

Beauty Supply Institute (BSI) offers support services to beauty supply businesses, primarily through the sale of business opportunity agreements that it refers to as “store opening packages.” Depending on the package purchased, BSI agrees to provide assistance finding a location, training on how to run the store, and assistance obtaining supplies and stocking shelves with those supplies. 

The Attorney General’s Office alleges that the business:

  • Failed to provide mandatory refunds;
  • Failed to provided mandatory disclosures;
  • Failed to maintain an active surety bond;
  • Collected up-front payments that were greater than 15 percent of the total purchase price; and
  • Failed to establish or maintain independent escrow accounts.

In resolution of these allegations, the companies have entered into a settlement with the Attorney General’s Office which permanently restrains and enjoins them from:

  • Advertising, offering, selling, or engaging in the sale of any Business Opportunity (as defined in Georgia state law) in the State of Georgia;
  • Disclosing, using, or benefitting from information collected from purchasers, including names, addresses, telephone numbers, email addresses, Social Security numbers, other identifying information, or any data that enables access to a customer’s account, including credit card, bank account, or other financial account, that was obtained through Derobis Enterprises or BSI;
  • Attempting to collect, sell, assign or otherwise transfer any right to collect payment from any purchaser who entered into a contract with Derobis Enterprises and/or BSI related to the sale of a Business Opportunity.

The settlement also prohibits the companies from enforcing any business opportunity contract. Finally, the companies agree not to conduct further business in the State of Georgia going forward, other than what is necessary to carry out the terms of the settlement.

If the companies default on any terms of the settlement, they shall be immediately required to pay civil penalties and refunds to purchasers in the amount of $2,189,255.00. 

A copy of the settlement can be viewed Download this pdf file. here .