Healthcare Franchises May Be Just What the Doctor Ordered
People have been asking me what the big trends in franchising are shaping up to be “the next big thing” for the near future. I have been keeping an eye on the various categories within franchising for over two decades and have seen many business models come and go. The first thing that I like to point out is the difference between a fad and a sustainable trend. Unfortunately, some franchise models have been built on fads and did not succeed long-term.
The bad news of fads
A fad is a temporary popular phenomenon that spikes for a period of time and then disappears, sometimes as fast as it arrived on the scene. Fads can make financial sense for business models like products that can be mass marketed while the fad is hot, but it is not a good fit for franchising due to the long-term growth model that franchising depends on.
The value in sustainable trends
A sustainable trend, on the other hand, is a shift in the marketplace that happens for a variety of reasons that creates a new reality. This also usually creates opportunities for those that can read the trend and jump in at the right time. We have all heard the phrase "the right place and the right time” and have seen a lot of people get rich by taking advantage of trends that have upward growth potential.
One of the exciting trends that I have seen develop over recent years is the merging of healthcare and franchising. Much like the real estate industry in the early 1970s, the healthcare industry is beginning to embrace the franchise model to organize owner/operators and expand.
Opportunity in healthcare franchise
I have interviewed many doctors, clinicians and franchise entrepreneurs and have narrowed down a few of the top reasons the healthcare category is exploding.
1. Franchising offers a quality growth system to meet the growing demand. America now has a booming population of senior citizens, which is growing, with thousands of people hitting retirement age each and every day. This has created an increased demand for senior care and other related services. In-home senior care franchises have been growing aggressively over the last several years to meet this demand. Sophisticated investors will want to keep an eye on companies that are franchising business models that address the explosive growth of this age group such as senior communities, retirement planning and other ancillary services.
2. Franchising offers the consumer a recognizable and consistent brand experience. Many people think of fast food when they see the word franchise, but the brands that we depend on daily and trust with our biggest decisions tend to be franchise brands. The consumer today is very familiar with franchise brands, and they are comfortable with the business model. This allows the operator to leverage the brand benefits of the entire organization, which makes them look bigger and often grow by adding more locations.
3. Franchising brings doctors, clinicians and business owners together, which creates a new synergy for success. Doctors and clinicians receive awesome education for their respective medical or dental practice but almost no business training. This is shocking when you consider that a vast majority of these individuals end up owning their own business. Many doctors that I met with struggle with the business side of their practice and desire to focus on being a doctor. They also pointed out that they don’t know what they don’t know because they didn’t learn business skills in school. Many of the up-and-coming franchises offer ownership by non-doctors or partnership options where doctors and non-doctors can own together. This way the doctors and clinicians can focus on the practice and the non-doctor can focus on building the business, marketing, human resources, technology, leadership, operations and finance.
4. Franchising gives doctors and clinicians the ability to compete with big corporate organizations. Many small practice doctors and clinicians are having a hard time staying afloat due to bigger corporations coming to their markets. Corporate medical and dental organizations are growing and buying up practices in record numbers. They have huge marketing budgets and infrastructure that the small practitioners don’t have access to. Franchise organizations bring individual business owners together under one brand and offer benefits like buying power, marketing and operations systems and support, training, coaching and many other elements that level the playing field for the operators to not only compete, but to grow and thrive.
We are seeing huge growth in this category due to these and other reasons. Senior care, urgent care centers, chiropractic, dental and orthodontic, sleep centers, med spas and many other healthcare-related medical and dental franchise opportunities are taking off. This appears to be a very sustainable trend for the franchise industry and can be an exciting way for franchise entrepreneurs such as multi-unit franchise owners to diversify.