Did not receive service but charged for it

Jurisdiction
Minnesota
Can a business demand full price of the service when the service was not provided?

A friend of mine decided to use services of a business (small business practicing wellness care). The business charged a $1000 non-refundable deposit and then the friend changed his mind and backed out of receiving the services. I understand that $1000 isn't coming back. But the business wants the full price of the service that they did not provide. They opened a credit account, which will go to collections and ruin my friend's credit if not paid.
On what grounds can they demand all that money (it's close to $10,000) and what can my friend do?
 
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