Doctors as franchisees? What will they think of next?
Actually, the idea of creating franchise opportunities that require licensed professionals in order to run isn't new. This is a dynamic that has been going on for many years in other types of franchises. It is a very logical extension of franchising to create opportunities that require licensed medical professionals in order to operate (no pun intended) the business.
Franchising is based on the idea that a business opportunity can be created that functions under a common brand, with consistent operating methods and standards, and with a successful marketing program that will bring in the customers. There is no reason not to apply this model to the practice of medicine; at its most basic level, a medical practice is simply a sale of services. There are many franchises that successfully sell all sorts of services, so medical care shouldn't necessarily be any different.
A number of franchise opportunities require either the franchisee or people working for the franchisee to have a special professional license in order to conduct business. This is not a new phenomenon in franchising, though the recent trend of involving the services of medical professionals in certain types of franchise businesses has brought it to the forefront. Some examples of licensed professionals that you'll find employed by--or running--franchises include:
- Medical professionals: Chiropractic, optometric and other medical doctors, registered nurses and doctors in rapid service clinics, and doctors and nurses providing medical treatment services to seniors in conjunction with senior care franchises are just a few examples from this rapidly expanding franchise field.
- Real estate brokers and agents: Most states have licensing and continuing education requirements in order to sell real estate and even more extensive requirements for a broker that owns or manages an office of agents.
- Contractors: Many franchises in the building, remodeling, plumbing and restoration services fields require contractor licenses in order to operate in most states.
- Accountants: Accountants and bookkeepers in most markets are required to meet education and licensing requirements in order to practice.
- Teachers: Most jurisdictions require minimum education requirements and a current teacher certificate license in order to participate in the education of children.
- Hair Stylists: In most states, a professional license is even required to provide cosmetology services such as haircuts, styling, nail services, permanent waves and other related services.
There are both advantages and disadvantages to becoming a franchisee with a concept that is dependent on licensed staff to conduct operations. The typical pros and cons to consider include:
The biggest advantage of a franchise which requires professionally licensed staff is that competition may be much less of an issue than in other businesses. Licensed workers are usually harder to get and this creates barriers to entry for potential competitors--especially when the process of obtaining the required license is arduous, such as in the medical field.
Another advantage is that repeat business is quite common in these types of businesses, so they can become very successful once the initial customer base is established.
Finally, franchisees often prefer to work with employees that have professional licensing requirements because they find them more professional and committed since they were willing to invest their own time and money to get into the field they are in.
The greatest challenge for a business that requires professional licenses to operate is usually finding sufficient staff, because there is usually a much smaller pool of potential employees to choose from. Retention of employees can also be a problem if there is more demand than supply in the field.
Due to the limited availability of people with the required licenses, labor costs tend to be higher than average in these sorts of businesses--again, especially when the process of obtaining the license is expensive or time consuming.
Finally, it is sometimes difficult to retrain licensed professionals to conduct the business according to the franchisor's defined method of doing business, since they often have their own opinions about how things should be done in their field. This potential resistance can cause havoc to a franchise that is trying to promote a common brand by using consistent operating standards and methods.
So, bottom line: Is getting into a franchise with professional license requirements a good move or not? Frankly it all depends on what you are trying to accomplish through business ownership. If the characteristics of the franchisee role match what you are looking for, if the economic opportunity appears to meet your parameters and goals, and if the validation of the existing franchisees doesn't raise red flags and has all the positives you're looking for, then this type of business could be perfect for you. If any of these are not true for you, then you need to look at some other type of franchise in order to find the right opportunity for you.
Jeff Elgin has almost 20 years of experience franchising, both as a franchisee and a senior franchise company executive. He's currently the CEO of FranChoice Inc., a company that provides free consulting to consumers looking for a franchise that best meets their needs.