PUBLISHED OCTOBER, 2019
The profession of Chiropractic continues to evolve; from behind a curtain to large multidiscipline health centers. Chiropractic offers the Chiropractor a vast range of practice options.
Is a Franchise a viable option for you? In theory a franchise makes perfect sense for many Chiropractic business models. A perfect match, the franchisor offers a MBA designed management system complemented with a loving and serving Chiropractor. The Chiropractor can focus on patient care and the franchisor can implement tried and true practice management systems, from billing and collections to marketing.
So why is it that many of these franchise/franchisor practices fail and others become extremely successful? In my twenty plus years of consulting Chiropractors, the answer is obvious; Chiropractors are unique. Our goals and the path to reach these goals are unconventional. The business of Chiropractic and the professionals within it cannot be compared to a McDonald’s or Dunkin Donuts. Chiropractors cannot be inserted into a business plan like a piece in a puzzle.
Most Chiropractors are counter culture by nature; we go against the grain, free thinkers, not profit driven. We are not pragmatic thinkers but run on emotions, it’s about how we feel, not logic. To expect this personality to abide by the rules, regulations and franchise business plan is challenging. Many franchise owners fail to read the manuals, watch the provided instructional videos and do not attend yearly meetings. The weekly management calls are fruitless for all parties with the doctor just yessing the management coach. This becomes a toxic relationship that can dissolve into disaster. I have been the mediator in many of these situations where there are no winners.
Good soldiers make good candidates for franchises. Doctors looking for direction, systems, accountability and camaraderie can achieve success. This candidate, mostly young to the profession will springboard to achievement, minimizing the risk of failure. Another good fit is a doctor that has gone it alone and has failed or hasn’t been able to succeed s due to lack of business acumen. I have seen doctors ready to apply for a job at Home Depot and as a last resort purchase a franchise and become extremely successful. Last I heard he was grossing $65,000 per month.
The Chiropractic franchise culture must be fully understood by the prospective franchisee. Franchises of today are varied; some are low cost cash based, symptomatic, pseudo medical, and broad based wellness multidiscipline and a mix and match of health care philosophies. Within these business models the payment options are equally diverse with cash, Care Credit, insurance based, short term, long term etc. The prospective franchisee should be aligning with the philosophy, culture and business compensation plan to be able to educate and motivate their patients. They must believe it so they can sell it.
One successful national Franchisor uses an interesting process before they award a franchise. They use a business behavioral assessment to understand a number of key factors necessary for successful franchise business ownership, measuring your dominance, your extroversion, your ability be compliant and how your behavior changes under stressful situations. This insightful analysis uses data not emotion to measure the validity of the relationship.
Is the cost of a franchise worth what you receive? The prospective franchisee must think long and hard to answer this question prior to signing the Franchise Agreement. There is no easy way to dissolve this relationship. This is a long marriage that doesn’t start with love, but profitability. The franchisor will paint a picture of a future filled with success. They are selling you your future for their own profitability as well as yours in that order. Many franchisees pay the initial fee and the monthly royalties’ with a feeling of fair exchange; others begrudgingly pay and always feel they have been taken advantage. Time also plays a part in this relationship; the longer the franchisee is involved the less they feel the franchisor is participating.
What is the risk of being a franchisee? A new graduate with no experience and minimal knowledge to open a new practice would lower the risk of investment. Also, a doctor that has failed in practice would lower the risk of future failure by utilizing the franchise systems and professional support. Conversely, an experienced doctor would not obtain the highest return on the initial investment and monthly royalties.
When deciding your professional path, one must look at this franchise relationship from all angles. Does it fit your personality? Does it fit your Chiropractic philosophy? Does it fit your financial goal? Is the term of commitment comfortable? Are you the puzzle piece that fits?
ABOUT DAVID FOSTER D.C.
Dr. Foster has practiced Chiropractic for the past 28 years and has co-owned 12 satellite practices. His undergraduate education includes a BS degree from Boston University with a major in finance and marketing prior to attending Life Chiropractic College. With his acquired knowledge and experience Dr. Foster has consulted the Chiropractic community for past decades in appraisals, Buy-Sell and Associate agreements and strategic negotiations in addition to a wide variety of legal, franchise issues, financial and strategic issues related to the business of Chiropractic. For more information go to www.BackOfficeConsults.com or call cell 973-885-8078 or email Dave@BackOfficeConsults.com