Client Overview
- A health and wellness company specializing in non-surgical body sculpting and fat freezing, partnered with Befree in 2018 to manage their finances across 5 clinics.
- The number of clinics skyrocketed to 52 within 5 years, spanning across 3 Australian states (NSW, VIC, QLD) and expanding to New Zealand (2 clinics) in FY 2021-22.
- Befree supported this growth by allocating additional resources (from 0.5 to 2.5) to manage the expanding client base.
Client Challenges
- However, in the post-pandemic period (FY 2022-23), some clinics struggled to generate revenue, leading to high fixed costs (rent, leasehold improvements) and marketing expenses borne by the client.
- In FY 2023-24, revenue declined for many clinics, hindering the client's ability to pay high leasehold costs and debts.
befree's Solution
- Tax Relief: Negotiated deferrals and payment plans with the Australian Taxation Office (ATO) to ease the financial burden.
- Liquidation: Supported the client's decision to voluntarily liquidate non-performing clinics (34 out of 52). This involved appointing liquidators, managing redundancies, and settling outstanding liabilities.
- Post-liquidation: The business emerged with a leaner structure focusing on 18 clinics (16 in Australia, 2 in New Zealand) and a reduced workforce.
- ATO Re-establishment: Helped re-establish a new Client Activity Centre (CAC) with the ATO after the liquidation.
- Payroll Tax Restructuring: Restructured group members and Single Lodger entities for streamlined payroll tax management across different states.
- CFO & Accountant Support: Supported the client's financial team with ATO communication and complaint lodging.
Rapid Growth
befree’s proactive approach helped the client navigate a period of rapid growth followed by financial challenges.
Achieved Financial Stability
Through strategic interventions and unwavering support, Befree empowered the client to restructure, regain financial stability, and pave the way for a successful future with 18 clinics.