How Dental Entrepreneurs Can Franchise Their Practices

Shawn Dill
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Franchising is not for everybody. But before we dig into how to franchise your dental practice, it’s important to explore the qualities that make for a successful franchisor so you can see if franchising is right for you.

Almost all of the service providers we’ve met and worked with are passionate about what they do. Very few, however, possess a strong business acumen or put systems in place when they opened their practice that enabled them to be successful.

In other words, their success wasn’t by design. It was by accident.

There’s nothing wrong with falling backwards into success. But if that describes your journey, you probably shouldn’t franchise your business. Furthermore, without clearly defined systems that powered your success, you have nothing to franchise.

When a franchisee pays money for a franchise, that’s what they’re paying you for: the scalable business systems such as marketing and sales that are unique to your practice.

Don’t miss the word “scalable,” because it’s crucial. If your practice succeeds because you have great bedside manner or a magnetic personality, that’s not something a franchisee can replicate. Therefore, it’s not scalable and it’s not sellable.

Why Consider Franchising?

Assuming you have scalable business systems that have enabled the success of your dental practice, then franchising presents two tremendous opportunities for you.

The first is that it allows you to serve far more people than you ever could on your own. Through franchising, you can spread the impact you have across the world.

It gets back to the passion I mentioned earlier. Every good dentist is motivated by a desire to serve others. What better way to serve more people than franchising?

Then there’s the massive financial windfall that can await you if you franchise properly. Not only do franchisees pay you upfront to use your brand and systems, you also get a percentage of their revenue. So, with every new franchise, you make more money. But there are two important points to keep in mind here.

First, I want to make it clear that you don’t have to franchise to be successful and change people’s lives with your service.

Second, franchising done right is profitable. Franchising done poorly can be financially disastrous. Thankfully, you don’t have to guess at what proper franchising looks like. Now that you know if franchising is right for you, here’s how to do it the right way.

Step #1: Identify What Makes You Unique 

In addition to documenting all your business systems and processes so that franchisees can begin to understand how you do things, you need to identify the unique selling proposition (USP) of your practice. This is what makes you different from every other dentist. It’s not enough to clean teeth and fill cavities. Every dentist does that. 

Think about Kentucky Fried Chicken. There are plenty of fried chicken restaurants out there, but none of them offer KFC’s secret blend of 11 herbs and spices. 

What’s your secret to success that nobody else can offer? Maybe you’re able to clean teeth 40% faster, or you sell a mouthwash that cuts the risk of cavities in half. 

Remember, your USP has to be scalable to be sellable, so “service with a smile” doesn’t count! (Although that is important and you should continue doing it.) 

Whatever it is, your USP plus the manual that outlines all your systems and processes form the foundation upon which you build a franchise people want to buy. 

Step #2: Work with a Qualified Law Firm

Franchising is a huge commitment of time and money, which is why you don’t want to go it alone. The stakes are too high. You need to work with a law firm with experience opening a healthcare franchise, which is different from other types of franchises.

A qualified law firm can help you navigate thorny legal issues like unlicensed individuals owning a healthcare practice. You don’t want an unlicensed franchise owner pressuring the dentist, who is technically the owner’s employee, to give more root canals or bill a code for insurance that pays more. Dentists could lose their license for doing that. 

Then there are issues surrounding medical records, patient confidentiality, and HIPAA, not to mention laws surrounding fee-splitting (which vary by state) and Stark laws, which cover self-referrals. Ask yourself if you really want to tackle all that alone.

No service providers could possibly navigate the legal challenges of starting a healthcare franchise by themselves. However, it might be even worse to navigate that landscape incorrectly due to bad help and expose yourself to risk.

Don’t jeopardize your license or your livelihood by making mistakes during the formation of your franchise. Qualified legal help will save you money in the long run.

Step #3: Offer Regular Franchisee Training

Once you’ve cleared the first two hurdles and you have an official dental franchise to sell, it’s time to replicate your business in multiple parts of the country. 

As you begin to sell franchises, it’s critical you get franchisees up to speed as quickly as possible. That way, you get paid and they get a quick return on their investment. 

To make this happen, you need to offer regular training for franchisees. 

Just because you have a training manual that outlines your processes, it doesn’t mean that knowledge is easily transferable to somebody else. What franchisees need to feel comfortable is hands-on training from someone who knows the business.

At a minimum, that means training with the franchisor or someone on the franchisor’s team. We’d also suggest holding annual franchisee meetings to offer training and updates.

Step #4: Be Ready to Lose the Golden Handcuffs

If you want to be a successful franchisor, you have to be ready to step away from your practice. This is a huge stumbling block for so many of the service providers we work with. They won’t lose their golden handcuffs and commit to building their franchise. Two factors go into making this decision.

The first is financial. If the money you’d lose from no longer providing patient care would devastate you financially, you’re not ready to take that step, and you should reconsider starting a franchise.

The second factor is psychological. I’m not saying you have to quit the day you decide to start a dental franchise. But when you get that franchise disclosure document in your hands and it’s time to start bringing in franchisees, that’s a labor-intensive process that will require your full attention. Are you okay with answering that call? 

If you want your franchise to be successful, the answer must be yes.

Your Opportunity is Waiting

Franchising can be extremely lucrative in the world of dentistry. With a franchise model, there are myriad opportunities that go beyond revenue sharing. Equipment financing and property leasing, just to name a couple, can potentially generate a massive financial windfall for franchisors.

Then there’s the service aspect. With a franchise, you can positively impact the lives of far more people than you could ever serve at your practice. If you have the spirit of an entrepreneur, franchising can be extremely fulfilling—if you do it right. 

Dr. Dill is CEO of the Specific Chiropractic Centers and author of None of Your Business: A Winning Approach to Turn Service Providers into Entrepreneurs. He offers consulting services to entrepreneurs and healthcare professionals through his website, shawndill.com, as well as through the Black Diamond Club, a community committed to mentoring, motivation, and business development for service professionals.

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