1851

A&nbsp;<a href="https://www.franchisetimes.com/franchise_news/complaints-mount-at-ellie-mental-health-as-franchisees-claim-they-were-misled/article_b99aa0ca-01cf-11f0-8007-1f1f8b727a1a.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">recent Franchise Times article</a> reports that&nbsp;<a href="https://elliementalhealth.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Ellie Mental Health</a>, a franchise-based mental health clinic system, is facing significant complaints from franchisees who claim they were misled about the business model’s financial viability. Many franchisees have engaged legal counsel, citing issues with financial projections, reimbursement rates and administrative services. Attorney&nbsp;<a href="https://www.linkedin.com/in/serena-chiquoine-36291056/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Serena Chiquoine</a> of&nbsp; <a href="https://www.dadygardner.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Dady &amp; Gardner</a>, who represents over 20 franchisees, said, “People have been forced to close or to sell for nothing. People are just struggling everywhere.”Franchisees allege they were sold a “clinic in a box” model with promises of support services such as billing, credentialing and a call center, but these services reportedly failed to meet expectations. According to Chiquoine, franchisees were given financial performance representations by&nbsp;<a href="https://repmgroup.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">REP’M Group</a>, Ellie’s former franchise sales firm, that “inflated the insurance reimbursement rates clinics could expect.” She added that Ellie’s Item 19 in its franchise disclosure document was “extremely misleading.”Ellie Board Advisor&nbsp;<a href="https://www.linkedin.com/in/michael-dimarco-93a76313/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Michael DiMarco</a> acknowledged past issues but stated, “We have operators who aren't great operators. They're not hitting their metrics; they don’t have their clinics properly staffed.” He emphasized that a well-run clinic could be profitable and noted that the franchisor has facilitated the sale of failing locations to new operators. Ellie has since transitioned to an in-house franchise development model and no longer uses Rep’M.Franchisees who initially signed on for multiple locations reported severe cash flow problems due to reimbursement shortfalls and administrative failures. “They pushed everybody to open, but they weren’t ready to handle these people’s cash or revenue cycles,” said&nbsp;<a href="https://www.linkedin.com/in/darrenbassel/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Darren Bassel</a>. Other franchisees, including&nbsp;<a href="https://www.linkedin.com/in/filipe-coelho-02042637/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Filipe Coelho</a> and&nbsp;<a href="https://www.linkedin.com/in/justin-fernstrom/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Justin Fernstrom</a>, described similar struggles, with Fernstrom stating, “We're doing everything the way that we're supposed to, and we still can't make any money.”Some franchisees, however, remain optimistic. Franchise Advisory Board member&nbsp;<a href="https://www.linkedin.com/in/david-brunick/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">David Brunick</a>, who operates multiple clinics, said, “Startups are hard. They just are, and there are a lot of moving pieces.” Similarly, multi-unit owner&nbsp;<a href="https://www.linkedin.com/in/gavin-england-19791632/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">Gavin England</a> noted that while billing issues persisted, Ellie allowed franchisees to opt out, which helped stabilize operations.Amid these disputes, Ellie’s financial stability remains a concern. An independent audit found “substantial doubt about the company’s ability to continue as a going concern.” DiMarco, however, insisted the brand is on solid financial ground, stating, “We’ve got plenty of financial wherewithal to continue, and we’re turning a profit.”Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="https://www.1851growthclub.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ellie-mental-health-franchisee-backlash-2728909" target="_blank" rel="nofollow">www.1851growthclub.com</a> and start your journey.

Ellie Mental Health Franchisee Backlash - Alleged Misrepresentations - 1851 Franchise

Ellie Mental Health Faces Franchisee Backlash Over Alleged Misrepresentations

1851 Franchise

Franchisees claim Ellie misled them on financial viability and support services, leading to closures, legal disputes and concerns about the brand’s stability.

ellie-mental-health-franchisee-backlash

Fresh Coat

photo of Fresh Coat team member wearing white work clothes, painting a wall red

Fresh Coat Painters of Vernon Hills Gives The Den a Fresh Look Through Fresh Coat Cares Initiative

fresh-coat-painters-of-vernon-hills-gives-the-den-a-fresh-look-through-fresh-coat-cares-initiative

Lindora

photo of Lindora professional referencing information booklet

What Makes Lindora Different: Medically Guided Approach to Wellness

what-makes-lindora-different-medically-guided-weight-loss

BIGGBY COFFEE

photo of BIGGBY COFFEE frozen, iced and hot beverages, and multiple bakery items, on a table

Celebrating 30 Years of BIGGBY® COFFEE: A Legacy of Growth and a Bright Future

celebrating-30-years-of-biggby-coffee-a-legacy-of-growth-and-a-bright-future

Woodhouse Spas

photo of Woodhouse Spas franchisee Kimberly Powell smiling at the camera, wearing a light blue shirt

From Spa Guest to Multi-Unit Owner: Kimberly Powell’s Journey With Woodhouse Spas

woodhouse-spas-franchise-success-kimberly-powell

Biscuit Belly Franchising

QSR Uncut: Biscuit Belly Founder Shares How He Built a Next-Gen Casual Breakfast Brand

biscuit-belly-founder-next-gen-breakfast-franchise

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Tariff Tensions Threaten U.S. Restaurants with Rising Costs and Supply Chain Disruptions

tariff-tensions-threaten-us-restaurants-with-rising-costs-and-supply-chain-disruptions

Roof Scientist Launches Franchise Opportunity, Revolutionizing Roof Preservation with Innovative Technology

roof-scientist-launches-franchise-opportunity-revolutionizing-roof-preservation-with-innovative-technology

Restaurant Business: How McDonald's Is Restructuring To Compete With Specialized Chains

restaurant-business-how-mcdonalds-is-restructuring-to-compete-with-specialized-chains

Design with hundred dollar bill and orange "recession" banner across the middle

ABC News: Recession Risks Are Rising, Economists Say. Here’s What to Know.

recession-risks-impact-economy-franchise-world

Paris Baguette Ranks Among Top Franchises on Entrepreneur’s Franchise 500® for 2025 - 1851 Franchise

Paris Baguette Ranks Among Top Franchises on Entrepreneur’s Franchise 500® for 2025

paris-baguette-ranks-among-top-franchises-on-entrepreneurs-franchise-500-for-2025

1851 Agg - McDonald's Sales Decline Expansion Continues - 1851 Franchise

McDonald’s Franchisees Feel the Pressure as Sales Decline and Expansion Continues

mcdonalds-franchisees-feel-the-pressure-as-sales-decline-and-expansion-continues

Photo of a basket of chicken wings with dipping sauce and celery

RestaurantNews: Franchisees File Comprehensive Legal Complaint Against Hurricane AMT

restaurantnews-franchisees-file-comprehensive-legal-complaint-against-hurricane-amt

Florida Franchisee Reflects on Success and Growth with Sylvan Learning

florida-franchisee-reflects-on-success-and-growth-with-sylvan-learning

The Top Quick Service Restaurant Franchises for 2025

the-top-quick-service-restaurant-franchises

Top 25 Emerging Restaurant Franchises - 1851 Franchise

Top 25 Emerging Restaurant Concepts to Consider in 2025

top-emerging-restaurant-concepts-to-consider

Military Veteran and Craft Beer Enthusiast to Bring Voodoo Brewing Co. to Toledo, Ohio

military-veteran-and-craft-beer-enthusiast-to-bring-voodoo-brewing-co-to-toledo-ohio

Franchisee spotlight featuring Ian and Dick Rydholm with gradient blue background and Sylvan logo

Ellie Mental Health Faces Franchisee Backlash Over Alleged Misrepresentations

MORE STORIES LIKE THIS