Jenny Craig Weight Loss Franchise Bankruptcy - Lessons To Learn


Jun 05, 2023

The recent announcement of the bankruptcy and immediate closure of the USA and Canadian branches of weight loss franchise Jenny Craig [1] has stunned the franchise industry, the company's franchisees, and its clients. However, in the wake of the demise of the chain, some valuable lessons have emerged for others to learn from.


Lesson 1: Don't put all your eggs in one basket.

Jenny Craig offered customers a choice of healthy pre-made meals as well as coaching lessons for effective weight loss. However, this proved to be insufficient to compete with others in the business.

It is important to regularly compare your offering to your competition, and identify where improvements or changes can be made in order to stay ahead. By planning ahead and understanding what the future may hold, you can ensure that your offering remains relevant and desirable to your customer base.


Lesson 2: Financial control is essential.

It has been reported that the chain owes millions of dollars to a number of creditors in Canada. This level of debt should not come as a surprise as it will have mounted up over a number of years. To avoid a similar situation arising in your business, keep control of your expenses.

You must maintain accurate financial records, and when your costs increase, you should find opportunities to reduce your expenditure in other areas or increase your own prices to compensate. You cannot allow your profit margin to be eroded without taking measures to restore efficiency.


Lesson 3: Manage your PR.

News that customers suspected something was amiss with Jenny Craig ahead of its announcement of bankruptcy suggests that more could have been done by the chain to manage its public relations.

It is not necessary to shout from the rooftops that you have a problem, but proactively pushing the message that you wish your customers to hear maintains customer confidence in your brand. Even when things are going wrong, you will maintain loyalty by being honest and up front in your public communications.


Lesson 4: Make sure you know how you would close the business.

Before you start onboarding franchisees, make sure that you know how you would wind down the business in the future if you decide to close the business or are forced to do so. Writing this into the franchise agreement means that any franchisees that you bring into the brand will understand your expectations and intent should such a scenario arise in the future.


We express our deepest sympathy to all those who are affected by the closure of the Jenny Craig franchise in the US and Canada, and hope that the lessons that have emerged from this situation will help others to maintain a profitable operating position.