Medical franchises run the gamut, from serving as drug testing labs and immunization sites, to focusing on medical staffing and billing. According to an article in Franchise Times, both individual and corporate total franchise revenue increased by 3.2% from 2019 to 2020.

Many franchises have seen tremendous growth. For example, Birmingham, Alabama-based American Family Care (AFC), which purchased Doctor’s Express in 2013, elevated both its system-wide sales by 56% and its franchise units by 20% from 2019 to 2020, implementing benefits like telehealth visits and mass testing sites. Based in Lake Success, NY, medical staffing franchise Around the Clock Healthcare (ATC) witnessed a total sales revenue increase of 62% from 2019 to 2020.

Not Every Franchise Will Be Profitable

Physicians should note that not every franchise will yield profitable results. Some may fail due to lack of funding. Others may fail to prosper if the franchise doesn’t adopt a proven business formula. Another potential downfall for medical franchises is failing to take advantage of available training and guidance for their franchise’s operations.

Benefits to owning a franchise include new franchise training in business services, management, and technology assistance, which enable franchises to operate efficiently and cost-effectively. According to research analyst Ritwik Donde, establishing a franchise affords physicians with a system of checks and balances that ensures optimization of performance to system standards. Donde also notes that franchises offer physicians the opportunity to receive more favorable rates from marketing companies and lenders.

Franchise owner and physician Samreh Mansoor touts the benefits provided by corporate, like creating a centralized website that provides links to each individual clinic’s webpage or negotiating discounts on EMR systems and equipment.

However, there are downsides to owning a medical franchise. For instance, some franchisees have had poor experiences with franchise owners, where the franchiser did not deliver on promised guidance or assistance.

Can Be More Expensive Than Owning a Practice

Owning a franchise can be more expensive than owning a practice, given the need for franchising fees, investment costs, and continuing royalty fees, which may range from 5% to 9% of gross sales. Other incurred costs include a national monthly advertising/marketing fund, which could amount up to 2% of gross sales.

Another requirement for most medical franchises is a minimum of one licensed practitioner who conforms with state requirements. Unhappyfranchisee.com publisher Sean Kelly notes that owners of a medical franchise will experience less autonomy than business owners. As such, the conformist nature of becoming a franchiser may not be well-suited for fiercely independent physicians.

Kelly strongly urges physicians to thoroughly research any potential franchise opportunity, assessing elements like financial health. He also stresses the importance of hiring an experienced franchise.

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